Determining the Financial Statement Effects of Inventory Errors Assume the 2011 ending inventory was understated by $100,000.
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Assume the 2011 ending inventory was understated by $100,000. Explain how this error would affect the 2011 and 2012 pretax income amounts. What would be the effects if the 2011 ending inventory were overstated by $100,000 instead of understated?
Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
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