Mulligan Corporation purchases inventory on account with terms FOB shipping point.The goods are shipped on December 30,

Question:

Mulligan Corporation purchases inventory on account with terms FOB shipping point.The goods are shipped on December 30, 2021, but do not reach Mulligan until January 5, 2022.Mulligan correctly records accounts payable associated with the purchase but does not include this inventory in its 2021 ending inventory count.

Required:1. If an error has been made, explain why.2. If an error has been made, indicate whether there is an understatement (U), overstatement (O), or no effect (N) on the reported amount of each financial statement element in the current year and following year. Ignore any tax effects.

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 =... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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