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USE SEPARATE EXCEL ANSWER SHEET. Ending inventory of Thompson Company is overstated by $3,000 in 2019; and ending inventory is understated by $5,000 in 2020.
USE SEPARATE EXCEL ANSWER SHEET. Ending inventory of Thompson Company is overstated by $3,000 in 2019; and ending inventory is understated by $5,000 in 2020. Assuming all other things are equal, determine: (1) whether net income for 2020 is overstated or understated and by how much. (2) whether 2020 ending retained earnings is overstated or understated and by how much.
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