You are the controller of Fagan Inc K L Howard, the president, recently mentioned to you that she found an error in the 2013 financial statements which she believes has corrected itself She determined, in discussions with the purchasing department, that 2013 ending inventory was overstated by $1 mi...

MEMO To K L Howard President From Student Subject 2013 ending inventory error ...

You are the controller of Fagan Inc. K. L. Howard, the president, recently mentioned to you that

Question:

You are the controller of Fagan Inc. K. L. Howard, the president, recently mentioned to you that she found an error in the 2013 which she believes has corrected itself. She determined, in discussions with the purchasing department, that 2013 was overstated by $1 million. K. L. says that the 2014 is correct, and she assumes that 2014 income is correct. K. L. says to you, “What happened has happened—there’s no point in worrying about it anymore.”

Instructions
You conclude that K. L. is incorrect. Write a brief, tactful memo to her, clarifying the situation.

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 =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...