McLelland Inc reported net income of $150,000 for 2011 and $165,000 for 2012 Early in 2012, McLelland discovers that the December 31, 2011, ending inventory was overstated by $15,000 For simplicity, ignore taxes Required 1 What is the correct net income for 2011 For 2012 2 Assuming the error was no...

1 Net income for 2011 135000 150000 15000 Net income for 2012 180000 165000 1500 ...

McLelland Inc. reported net income of $150,000 for 2011 and $165,000 for 2012. Early in 2012, McLelland

Question:

McLelland Inc. reported net income of $150,000 for 2011 and $165,000 for 2012. Early in 2012, McLelland discovers that the December 31, 2011, was overstated by $15,000. For simplicity, ignore taxes.
Required:
1. What is the correct net income for 2011? For 2012?
2. Assuming the error was not corrected, what is the effect on the at December 31, 2011? At December 31, 2012?
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 =... 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...