Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b) Profit (c) Total current assets (d) Equity In making the physical counts of inventory, the following errors were made: • Inventory on December 31, 2020: understated $80,000 • Inventory on December 31, 2021: overstated $22,000 Required: For each of the preceding financial statement items-(a), (b), (c), and (d)-prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a min sign.) a. Cost of goods sold: Reported Adjustments: Dec. 31, 2020 error Dec. 31, 2021 error Corrected b. Profit: Reported Adiustments: Dec. 31. 2020 error $ $ Financial Statements for Year Ended December 31. 2022 2020 2021 $ 765,000 $ 897,000 $ 820,000 270,000 325,000 281,000 1,255,000 1,365,000 1,200,000 1,387,000 1,530,000 1,332,000 $ 2020 765,000 $ (80,000) 2021 270,000 $ 80.000 685,000 $ 999,000 $ 897,000 $ 820,000 80,000 22,000 2022 325,000 $ (80.000) (22,000) 798,000 281,000 Numbers

Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b) Profit (c) Total current assets (d) Equity In making the physical counts of inventory, the following errors were made: • Inventory on December 31, 2020: understated $80,000 • Inventory on December 31, 2021: overstated $22,000 Required: For each of the preceding financial statement items-(a), (b), (c), and (d)-prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a min sign.) a. Cost of goods sold: Reported Adjustments: Dec. 31, 2020 error Dec. 31, 2021 error Corrected b. Profit: Reported Adiustments: Dec. 31. 2020 error $ $ Financial Statements for Year Ended December 31. 2022 2020 2021 $ 765,000 $ 897,000 $ 820,000 270,000 325,000 281,000 1,255,000 1,365,000 1,200,000 1,387,000 1,530,000 1,332,000 $ 2020 765,000 $ (80,000) 2021 270,000 $ 80.000 685,000 $ 999,000 $ 897,000 $ 820,000 80,000 22,000 2022 325,000 $ (80.000) (22,000) 798,000 281,000 Numbers

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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