You are the controller of Small Toys Inc. Mutahir Kazmi, the president, recently mentioned to you that
Question:
You are the controller of Small Toys Inc. Mutahir Kazmi, the president, recently mentioned to you that he found an error in the 2020 financial statements that he believes has now corrected itself. In discussions with the purchasing department, Mutahir determined that the 2020 ending inventory was understated by $1 million. However, the 2021 ending inventory is correct. Mutahir assumes that 2021 profit is correct and comments to you, “What happened has happened—there’s no point in worrying about it now.”
Instructions
You conclude that Mutahir is wrong. Write a brief, tactful email to him that clarifies the situation.
Ending InventoryThe 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...
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Accounting Principles Volume 1
ISBN: 978-1119502425
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak