On December 31, 2019, Ana Inc. sold merchandise for P750,000 to Ysa Inc. The terms of the sales were net 30, FOB shipping point. The merchandise was shipped on December 31, 2019, and arrived at Ysa Inc. on January 5, 2020. Due to a clerical error, the sale was not recorded until January 2020 and the merchandise sold at a 25% markup on cost was included in inventory on December 31, 2019. What was the effect of the errors on cost of goods sold for 2019? A. understated by 600,000 B. overstated by 600,000 C. understated by 750,000 D. overstated by 750,000
On December 31, 2019, Ana Inc. sold merchandise for P750,000 to Ysa Inc. The terms of the sales were net 30, FOB shipping point. The merchandise was shipped on December 31, 2019, and arrived at Ysa Inc. on January 5, 2020. Due to a clerical error, the sale was not recorded until January 2020 and the merchandise sold at a 25% markup on cost was included in inventory on December 31, 2019. What was the effect of the errors on cost of goods sold for 2019? A. understated by 600,000 B. overstated by 600,000 C. understated by 750,000 D. overstated by 750,000
Chapter10: Inventory
Section: Chapter Questions
Problem 13PA: Company Elmira reported the following cost of goods sold but later realized that an error had been...
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On December 31, 2019, Ana Inc. sold merchandise for P750,000 to Ysa Inc. The terms of the sales were net 30, FOB shipping point.
The merchandise was shipped on December 31, 2019, and arrived at Ysa Inc. on January 5, 2020.
Due to a clerical error, the sale was not recorded until January 2020 and the merchandise sold at a 25% markup on cost was included in inventory on December 31, 2019.
What was the effect of the errors on cost of goods sold for 2019?
A. understated by 600,000
B. overstated by 600,000
C. understated by 750,000
D. overstated by 750,000
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