Chapter 8: Inventory

As of the fiscal 2018 year-end, a company unknowingly overstated its ending inventory.

RequiredIndicate how, if at all, the companys overstatement of its fiscal 2018 ending inventory affected each of the financial statement elements listed below as follows:

If the element was overstated as a result of the error, enter OVER in the blank provided.

If the element was understated as a result of the error, enter UNDER in the blank provided.

If the element was neither overstated or understated as a result of the error, i.e., if the element

was correctly stated despite the error, enter NONE in the blank provided.

Income Statements:

	Fiscal 2018		Fiscal 2019
Sales Revenue
Cost of Goods Sold
Gross Profit
Income before Income Tax
Income Tax Expense
Net Income

Balance Sheet:

	Fiscal 2018		Fiscal 2019
Accounts Receivable
Inventory
Accounts Payable
Retained Earnings