Morena White Water Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of

Question:

Morena White Water Co. sells canoes, kayaks, whitewater rafts, and other boating supplies.

During the taking of its physical inventory on December 31, 2008, Morena White Water incorrectly counted its inventory as $279,150 instead of the correct amount of $285,780.

a. State the effect of the error on the December 31, 2008, balance sheet of Morena White Water.

b. State the effect of the error on the income statement of Morena White Water for the year ended December 31, 2008.

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...