McLelland Inc. reported net income of $150,000 for 2009 and $165,000 for 2010. Early in 2010, McLelland
Question:
McLelland Inc. reported net income of $150,000 for 2009 and $165,000 for 2010. Early in 2010, McLelland discovers that the December 31, 2009 ending inventory was overstated by $8,000. For simplicity, ignore taxes.
Required:
1. What is the correct net income for 2009? For 2010?
2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, 2009? At December 31, 2010?
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 =... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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1 Net income for 2009 142000 Net income for 2010 173000 2 For 2009 ...View the full answer
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Related Book For 
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger
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