QUESTION 15 Ruiz, Inc. has had some turnover in its parts inventory area. As a result, some inventory counting errors have been made in taking the physical ending inventory in the last two fiscal years. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory is overstated $32,000 in 2025 and understated $4,000 in 2026. Charlie has a 9/30 fiscal year-end. Assume that no correcting entries were made and that no additional errors occurred in fiscal 2027. Ignoring income taxes, by how much will working capital be overstated or understated at 9/30/26? O $4,000 understated O $36,000 understated. O $4,000 overstated O $32,000 overstated
QUESTION 15 Ruiz, Inc. has had some turnover in its parts inventory area. As a result, some inventory counting errors have been made in taking the physical ending inventory in the last two fiscal years. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory is overstated $32,000 in 2025 and understated $4,000 in 2026. Charlie has a 9/30 fiscal year-end. Assume that no correcting entries were made and that no additional errors occurred in fiscal 2027. Ignoring income taxes, by how much will working capital be overstated or understated at 9/30/26? O $4,000 understated O $36,000 understated. O $4,000 overstated O $32,000 overstated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vikrambahi
Transcribed Image Text:QUESTION 15
Ruiz, Inc. has had some turnover in its parts inventory area. As a result, some inventory counting errors have been made in taking the physical ending
inventory in the last two fiscal years. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory is
overstated $32,000 in 2025 and understated $4,000 in 2026.
Charlie has a 9/30 fiscal year-end. Assume that no correcting entries were made and that no additional errors occurred in fiscal 2027. Ignoring
income taxes, by how much will working capital be overstated or understated at 9/30/26?
O $4,000 understated
O $36,000 understated.
O $4,000 overstated
O $32,000 overstated
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