McLelland Inc reported net income of $175,000 for 2019 and $210,000 for 2020 Early in 2020, McLelland discovers that the December 31, 2019 ending inventory was overstated by $20,000 For simplicity, ignore taxes Required 1 What is the correct net income for 2019 For 2020 2 Assuming the error was not...

1 Net income for 2019 155000 175000 20000 Net income for 2020 230000 210000 2000 ...

McLelland Inc. reported net income of $175,000 for 2019 and $210,000 for 2020. Early in 2020, McLelland

Question:

McLelland Inc. reported net income of $175,000 for 2019 and $210,000 for 2020. Early in 2020, McLelland discovers that the December 31, 2019 was overstated by $20,000. For simplicity, ignore taxes.
Required:
1. What is the correct net income for 2019? For 2020?
2. Assuming the error was not corrected, what is the effect on the at December 31, 2019? At December 31, 2020?
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 =... 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...