During the taking of its physical inventory on December 31, 2012, Kates Interiors Company incorrectly counted its

Question:

During the taking of its physical inventory on December 31, 2012, Kate’s Interiors Company incorrectly counted its inventory as $83,175 instead of the correct amount of $90,700. Indicate the effect of the misstatement on Kate’s Interiors’ December 31, 2012, and income statement for the year ended December 31, 2012.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...