During 2011, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by
Question:
During 2011, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts:
WMC uses a periodic inventory system and the FIFO cost method.
Required:
1. Determine the effect of these errors on retained earnings at January 1, 2011, before any adjustments. Explain your answer. (Ignore income taxes.)
2. Prepare a journal entry to correct the errors.
3. What other step(s) would be taken in connection with the correction of the errors?
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Requirement 1 The 2009 error caused 2009 net income to be understated but since 2009 ending inventor...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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