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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Topic Video
Question
Effect of the error # 2 for the year 2019
Answer the ff:
O-Overstated | U-Understated | X-No effect | |
Purchases | |||
Cost of Sales | |||
Net income | |||
Inventory | |||
Accounts Payable | |||
RE before closing | |||
RE after closing |

Transcribed Image Text:You are examining the financial statements of DON JOHN CORPORATION which ends on December
31. DON JOHN CORP. uses the physical inventory system of accounting for inventory. During your
examination, you discovered the errors below.
1. Goods received in January 2020 were recorded as purchase on account in December 2019. The
goods were included in the 2019 ending inventory.
2. The inventory at December 31, 2019 is understated as a result of errors in physical count.
3. Goods received in December 2019 were recorded as purchases when paid in 2020. The goods
were excluded from the 2019 ending inventory.
4. The inventory at December 31, 2019 is overstated as a result of the inclusion of goods acquired
on consignment.
5. Goods received in January 2020 were recorded as purchase on account in December 2019. The
goods were excluded from the 2019 ending inventory.
6. Goods received in December 2019 were recorded as purchases when paid in 2020. The goods
were included in the 2019 ending inventory.
Enter the effect of the errors in the solution guide below. Use the following symbols:
O-Overstated,
U-Understated X-No effect
Expert Solution

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Effect of the error # 2 for the year 2020
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Effect of the error # 2 for the year 2020
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- Please do not give solution in image format thankuarrow_forwardOn December 31, 2023, Jen & Mink Clothing (J&M) performed the inventory count and determined the year-end ending inventory value to be $77500, it is now January 8, 2024, and you have been asked to double-check the year-end inventory listing. J&M uses a perpetual inventory system Note: Only relevant items are shown on the inventory listing. # 1 2 Jen & Mink Clothing Inventory Listing December 31, 2023 Inventory Number Inventory Description Quantity (units) Blue jackets. Black pants 7649 10824 104 308 Unit Cost ($) Total Value ($) 24 2,496 5,852 19 Total Inventory $77,500 The following situations have been brought to your attention: a. On January 3, 2024, J&M received a shipment of 104 blue jackets, for $2,496 (Item #7649). The inventory was purchased December 23, 2023, FOB destination from Global Threads. This inventory was included in J&M's inventory count and inventory listing. b. On December 29, 2023, J&M sold scarves (Item # 5566) to a customer with a sale price of $740 and cost of…arrow_forwardSolve both questions Do not give answer in imagearrow_forward
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