12th Man held $12,000 in inventory from CC Creations, another Aggie merchandiser, while CC moved warehouses. The goods were on hand at December 31, Y1 and were counted by staff accountants as part of 12th Man's inventory. CC retrieved the inventory in January of Y2.

Step 2: Write out correct and recorded journal entries for each bullet, assuming 12^th Man Co uses a perpetual inventory system. Use the COGS formula to help understand the impact on count errors. Then, summarize the impact of each bullet point on assets, liabilities, and equity.

Remember that count errors in a given year affect the value of ending inventory.

Bullet C

Journal Entries (correct & incorrect):

COGS formula:

	Year 1	Year 2
Beginning inventory
+ Purchases
- Ending inventory
COGS

	Assets Bullet C	Liabilities Bullet C	Equity Bullet C
Y1
Y2

Step 3: Summarize effects of all 3 errors into one chart.

	Assets	Liabilities	Equity
Y1
Y2