Sparky, Inc. follows a calendar-year end. Its financial statements for the years
ID: 2548256 • Letter: S
Question
Sparky, Inc. follows a calendar-year end. Its financial statements for the years 2017 and 2016 contained errors as follows:
Ending Inventory for 2016 was overstated by $8,000
Ending Inventory for 2017 was overstated by $3,000
No correcting entries were made at December 31, 2017. Determine the following:
a. Indicate the effect on 2017 Net Income (ignore taxes. Indicate O for Overstated; U for Understated; or NE for No Error. If your answer is overstated by $4,000, record your answer as O4000.)
b. Indicate the effect on 2017 Ending Retained Earnings (enter your answer same as above).
Effect on 2017 Net Income
Effect on Ending Retained Earnings at December 31, 2017
$
$
Effect on 2017 Net Income
Effect on Ending Retained Earnings at December 31, 2017
$
$
Explanation / Answer
Calculate effect on net income and retained earnings ;
Effect on 2017 Net Income Effect on Ending Retained Earnings at December 31, 2017 U5000 U5000Related Questions
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