What is the effect of a $40000 overstatement of last year's inventory on current years ending retained earning balance? Overstated by $40000. Need more information to determine. Understated by $40000. No effect.

What is the effect of a $40000 overstatement of last year's inventory on current years ending retained earning balance? Overstated by $40000. Need more information to determine. Understated by $40000. No effect.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 1TF: An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the...

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What is the effect of a $40000 overstatement of last year's inventory on current years ending retained earning balance?
Overstated by $40000.
Need more information to determine.
Understated by $40000.
No effect.

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