Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 9, Problem 9.8E
Exercise 9.8
LO 2
Effects of inventory error Assume that the ending inventory of a merchandising firm is overstated by $20,000.
Required:
a.By how much and in what direction (overstated or understated) will the firm’s cost of goods sold be misstated?
h.
If this error is not corrected, what effect will it have on the subsequent period’s operating income?
c.If this error is not corrected, what effect will it have on the total operating income of the two periods (the period in which
there is an error and the subsequent period) combined?
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Students have asked these similar questions
-8 Effects of inventory error Assume that the ending inventory of a merchandising
a
2
firm is overstated by $40,000.
Required:
a. By how much and in what direction (overstated or understated) will the firm's
cost of goods sold be misstated?
b. If this error is not corrected, what effect will it have on the subsequent period's
operating income?
If this error is not corrected, what effect will it have on the total operating
income of the two periods (the period in which there is an error and the subse-
quent period) combined?
с.
Exercise 9-9 (Static) Effects of inventory error LO 9-2
If the ending inventory of a firm is overstated by $70,000, by how much and in what direction (overstated or understated) will the firm's
operating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect the
effects of the ending inventory error and determine the effect on cost of goods sold.)
Operating income
by
QUESTION 15
During a period when inventory costs are steadily increasing, which of the following is true?
O a. Net income will be higher under LIFO than under FIFO.
O b. Cost of goods sold will be lower under LIFO than under FIFO.
O c. Ending inventory value will be higher under LIFO than under FIFO.
O d. Income taxes will be lower under LIFO than under FIFO.
Chapter 9 Solutions
Accounting: What the Numbers Mean
Ch. 9 - Prob. 9.1MECh. 9 - Mini-Exercise 9.2 LO 5 Calculate operating income...Ch. 9 - Mini-Exercise 9.3 LO 6 Calculate basic EPS Net...Ch. 9 - Mini-Exercise 9.4
LO 10
Calculate cash flows from...Ch. 9 - Exercise 9.5
LO 1
Calculate earned revenues Big...Ch. 9 - Exercise 9.6 LO 1 Calculate earned revenues...Ch. 9 - Exercise 9.7 LO 2 Effects of inventory error If...Ch. 9 - Exercise 9.8 LO 2 Effects of inventory error...Ch. 9 - Prob. 9.9ECh. 9 - Prob. 9.10E
Ch. 9 - Exercise 9.11 LO 5 Operating income versus net...Ch. 9 - Prob. 9.12ECh. 9 - Prob. 9.13ECh. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Prob. 9.18ECh. 9 - Problem 9.19 LO 5 Calculate operating income and...Ch. 9 - Prob. 9.20PCh. 9 - Problem 9.21
LO 3
Use gross profit ratio to...Ch. 9 - Prob. 9.22PCh. 9 - Prob. 9.23PCh. 9 - Problem 9.24
LO 10
Prepare a statement of cash...Ch. 9 - Problem 9.25
LO 10
Cash flows from operating,...Ch. 9 - Prob. 9.26PCh. 9 - Prob. 9.27PCh. 9 - Problem 9.28 LO 10. 11 Complete balance sheet and...Ch. 9 - Prob. 9.29PCh. 9 - Prob. 9.30PCh. 9 - Prob. 9.31CCh. 9 - Prob. 9.32CCh. 9 - Prob. 9.33C
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