FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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E8-24 (L05) (Inventory Errors-Periodic) Ann M. Martin Company makes the following errors during the current year.
(Evaluate each case independently and assume ending inventory in the following year is correctly stated.)
2. Both ending inventory and purchases and related accounts payable are understated. (Assume this purchase was recorded
and paid for in the following year.)
Instructions
Indicate the effect of each of these errors on working capital, current ratio (assume that the current ratio is greater than 1),
retained earnings, and net income for the current year and the subsequent year.
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Transcribed Image Text:E8-24 (L05) (Inventory Errors-Periodic) Ann M. Martin Company makes the following errors during the current year. (Evaluate each case independently and assume ending inventory in the following year is correctly stated.) 2. Both ending inventory and purchases and related accounts payable are understated. (Assume this purchase was recorded and paid for in the following year.) Instructions Indicate the effect of each of these errors on working capital, current ratio (assume that the current ratio is greater than 1), retained earnings, and net income for the current year and the subsequent year.
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