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, 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 not corrected, what is the effect on the balance sheet at December 31, 2011? At December 31, 2012?


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  • CreatedSeptember 22, 2015
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