During the taking of its physical inventory on December 31, 2010, Euro Bath Company incorrectly counted its

Question:

During the taking of its physical inventory on December 31, 2010, Euro Bath Company incorrectly counted its inventory as $496,000 instead of the correct amount of $480,000. Indicate the effect of the misstatement on Euro Bath’s December 31, 2010, and income statement for the year ended December 31, 2010.

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...