Goods purchased FOB shipping point were shipped to Merkley Co on December 31, 2011 The purchase was recorded in 2011, but the goods were not included in ending inventory (a) What effect would this error have had on reported income for 2011 had it not been discovered (b) What entry should be made on...

a Cost of goods sold would be overstated and net income woul ...

Goods purchased FOB shipping point were shipped to Merkley & Co. on December 31, 2011. The purchase

Question:

Goods purchased FOB shipping point were shipped to Merkley & Co. on December 31,
2011. The purchase was recorded in 2011, but the goods were not included in . (a) What effect would this error have had on reported income for 2011 had it not been discovered?
(b) What entry should be made on the books to correct this error, assuming that the books have not yet been closed for 2011?

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...