FirstIn Company reported profit of $90,000 in 2023. When counting its inventory on December 31, 2023, the
Question:
FirstIn Company reported profit of $90,000 in 2023. When counting its inventory on December 31, 2023, the company forgot to include items stored in a separate room in the warehouse. As a result, ending inventory was understated by $7,000.
a. What is the correct profit for 2023?
b. What effect, if any, will this error have on total assets and owner’s equity reported on the balance sheet at December 31, 2023?
c. Assuming the inventory is correctly counted on December 31, 2024, what effect, if any, will this error have on the 2024 financial statements?
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a The understatement of ending inventory caused cost of goods sold to be overstated by 7000 and prof...View the full answer
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Related Book For 
Accounting Principles Volume 1
ISBN: 9781119786818
9th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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