Effects of Inventory errors
Seshavradhanr Rao Maramraj
ACC 539
Week 2
August 10 2008
Effects of Inventory errors
A. The ending inventory reported in 2002was overstated by $ 23,500 for merchandise that Kirk’s Servistar hold on consignment. Therefore, the ending inventory in 2002 is $ 91400-$ 23,500 = $ 67,900 and the beginning inventory in 2003 is $ 67,900.
The correction of the 2002 and 2003 income statement is
| | |2003 | | |2002 | |
| |Sales | |$541,200 | | | | | ...