Question

In: Accounting

During the taking of its physical inventory on December 31, 20Y3, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880.


Effect of Inventory Errors 

During the taking of its physical inventory on December 31, 20Y3, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880. Indicate the effect of the misstatement on Waterjet Bath's December 31, 20Y3, balance sheet and income statement for the year ended December 31, 20Y3. Also record the amount of each overstatement or understatement. Enter all amounts as positive numbers. 

Solutions

Expert Solution

Inventory Balance Sheet Overstated $8,780
Current assets Balance Sheet Overstated $8,780
Total assets Balance Sheet Overstated $8,780
Stockholders' equity Balance Sheet Overstated $8,780
Cost of goods sold Income Statement Understated $8,780
Gross profit Income Statement Overstated $8,780
Net income Income Statement Overstated $8,780

Difference in amount = $728,660 - $719,880 = $8,780

ekkarill92 answered 2 years ago
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