Redford Company hired a new store manager in October 2021, who determined the ending inventory on...

Transcribed Image Text:

Redford Company hired a new store manager in October 2021, who determined the ending inventory on December 31, 2021, to be $66,000. In March, 2022, the company discovered that the December 31, 2021 ending inventory should have been $75,600. The December 31, 2022, inventory was correct. (Assume that the errors were not corrected until after 2022.) Ignore income taxes. Required: Complete the following table to show the effects of the inventory error on the four amounts listed. Give the amount of the discrepancy and indicate whether it was overstated, understated or no effect. Year 2021 2022 Ending Inventory 9,600 Understated Cost of Goods Sold Net Income Redford Company hired a new store manager in October 2021, who determined the ending inventory on December 31, 2021, to be $66,000. In March, 2022, the company discovered that the December 31, 2021 ending inventory should have been $75,600. The December 31, 2022, inventory was correct. (Assume that the errors were not corrected until after 2022.) Ignore income taxes. Required: Complete the following table to show the effects of the inventory error on the four amounts listed. Give the amount of the discrepancy and indicate whether it was overstated, understated or no effect. Year 2021 2022 Ending Inventory 9,600 Understated Cost of Goods Sold Net Income

Answer rating: 100% (QA)

Year Ending muuntory 2021 9600 under stated 2022 No effect Cost of Goods Sold ... View the full answer