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Effect of Errors in Physical Inventory;Yellowstone River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking...

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Effect of Errors in Physical Inventory;Yellowstone River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2014, Yellowstone River Supply incorrectly counted its inventory as $324,650 instead of the correct amount of $338,500.;Enter all amounts as positive numbers.;a. State the effect of the error on the December 31, 2014, balance sheet of Yellowstone River Supply.;Balance Sheet Items Understated / Overstated Amount;Merchandise Inventory SelectUnderstatedOverstatedNo EffectItem 1 $;Current Assets SelectUnderstatedOverstatedNo EffectItem 3 $;Total Assets SelectUnderstatedOverstatedNo EffectItem 5 $;Owner's Equity SelectUnderstatedOverstatedNo EffectItem 7 $;b. State the effect of the error on the income statement of Yellowstone River Supply for the year ended December 31, 2014.;Income Statement Items Overstated / Understated Amount;Cost of Merchandise Sold SelectOverstatedUnderstatedNo EffectItem 9 $;Gross Profit SelectOverstatedUnderstatedNo EffectItem 11 $;Net Income SelectOverstatedUnderstatedNo EffectItem 13 $;c. If uncorrected, what would be the effect of the error on the 2015 income statement?;Income Statement Items Overstated / Understated Amount;Cost of Merchandise Sold SelectOverstatedUnderstatedNo EffectItem 15 $;Gross Profit SelectOverstatedUnderstatedNo EffectItem 17 $;Net Income SelectOverstatedUnderstatedNo EffectItem 19 $

 

Paper#74434 | Written in 18-Jul-2015

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