(Learning Objective 5: Assessing the effect of an inventory error on 2 years) Binders $5.8 million cost...
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(Learning Objective 5: Assessing the effect of an inventory error on 2 years) Binder’s
$5.8 million cost of inventory at the end of last year was understated by $1.7 million.
1. Was last year’s reported gross profi t of $3.8 million overstated, understated, or correct?
What was the correct amount of gross profi t last year?
2. Is this year’s gross profi t of $5.5 million overstated, understated, or correct? What is the correct amount of gross profi t for the current year?
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Related Book For 
Financial Accounting International Financial Reporting Standards
ISBN: 9780273777809
1st Global Edition
Authors: Walter T Harrison, Charles Horngren, Bill Thomas, Themin Suwardy
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