Effect of errors in physical inventory Obj. 6 Fonda Motorcycle Shop sells motorcycles, ATVs, and other related
Question:
Effect of errors in physical inventory Obj. 6 Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y1, Fonda incorrectly counted its inventory as $452,500 instead of the correct amount of $425,500.
a. State the effects of the error on the December 31, 20Y1, balance sheet of Fonda Motorcycle Shop.
b. State the effects of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 20Y1.
c. If uncorrected, what would be the effects of the error on the 20Y2 income statement?
d. If uncorrected, what would be the effects of the error on the December 31, 20Y2, balance sheet?
AppendixLO1
Step by Step Answer:
Corporate Financial Accounting
ISBN: 9781337398176
15th Edition
Authors: Carl Warren, Jefferson Jones