Question
McLelland Inc. reported net income of $175,000 for 2013 and $210,000 for 2014. Early in 2014, McLelland discovers that the December 31, 2013 ending inventory
McLelland Inc. reported net income of $175,000 for 2013 and $210,000 for 2014. Early in 2014, McLelland discovers that the December 31, 2013 ending inventory was overstated by $20,000. For simplicity, ignore taxes.
Required:
1. What is the correct net income for 2013? For 2014?
| Net Income | |
| 2013 | $ |
| 2014 | $ |
2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, 2013? At December 31, 2014?
| Net Income | |
| December 31, 2013 | SelectOverstatedUnderstatedNo effectItem 3 |
| December 31, 2014 | SelectOverstatedUnderstatedNo effect Item 4 |
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Horngrens Financial And Managerial Accounting The Managerial Chapters And The Financial Chapters Plus Pearson Mylab Accounting With Pearson Global Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
6th Global Edition
1292270756, 978-1292270753
