Business, 21.07.2020 18:01 Jakyramason

You have been hired as the new controller for the Ralston Company. Shortly after joining the company in 2021, you discover the following errors related to the 2019 and 2020 financial statements: a. Inventory at December 31, 2019, was understated by $7,700.
b. Inventory at December 31, 2020, was overstated by $10,700.
c. On December 31, 2020, inventory was purchased for $4,700. The company did not record the purchase until the inventory was paid for early in 2021. At that time, the purchase was recorded by a debit to purchases and a credit to cash.

Required:
1. Assuming that the errors were discovered after the 2015 financial statements were issued, analyze the effect of the errors on 2015 and 2014 cost of goods sold, net income, and retained earnings. (Ignore income taxes.)
2. Prepare a journal entry to correct the errors.
3. What other step(s) would be taken in connection with the error?

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 10:30

How are interest rates calculated by financial institutions? financial institutions generally calculate interest as (1) interest or (.

Answers: 1

Answer

Business, 22.06.2019 20:00

Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. this increased level of is leading to increased emphasis on management.

Answers: 2

Answer

Business, 22.06.2019 21:20

In a market economy, supply and demand are important because theya. (i) play a critical role in the allocation of the economy's scarce resources.b. (ii) determine how much of each good gets produced.c. (iii) can be used to predict the impact on the economy of various events and policies.d. all of (i), (ii), and (iii) are correct.

Answers: 3

Answer

Business, 22.06.2019 22:00

Which of the following is a function performed by market prices? a. market prices communicate information to buyers and sellers. b. market prices coordinate the decisions of buyers and sellers. c. market prices motivate entrepreneurs to produce those products that are currently most desired relative to their costs of production. d. all of the above are functions performed by market prices.

Answers: 2

Answer

You know the right answer?

You have been hired as the new controller for the Ralston Company. Shortly after joining the company...

Questions