Mila Company discovers in 2014 that its ending inventory at December 31, 2013, was overstated by $5,000.

Question:

Mila Company discovers in 2014 that its at December 31, 2013, was overstated by $5,000. What effect will this error have on
(a) 2013 profit,
(b) 2014 profit, and
(c) the combined profit for the two years?
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 =...