Need help, on my last few assignments for the semester. I\'m behind in work. Any

Question

Need help, on my last few assignments for the semester. I'm behind in work. Any help will be greatly appreciated. Than you very much!

During the taking of its physical inventory on December 31, 20Y3, Sellers Company incorrectly counted its inventory as $444,530 instead of the correct amount of $475,645. Indicate the effect of the misstatement on Sellers's December 31, 20Y3, balance sheet or income statement for the year ended December 31, 20Y3. For each, select if the amount is overstated or understated. Then, input the over or under amount, entered as a positive value.

Cost of goods sold $ Current assets $ Gross profit $ Inventory $ Net income $ Stockholders' equity $ Total assets $

Explanation / Answer

Solution:

Amount of Misstatement Overstatement (Understatement)

Balance Sheet:

Merchandise inventory understated

(31115)

Current assets understated

(31115)

Total assets understated

(31115)

Stock holder’s equity understated

(31115)

Income Statement:

Cost of merchandise sold overstated

31115

Gross profit understated

(31115)

Net Income understated

(31115)

Note: $475645 - $444530 = $(31115)

Amount of Misstatement Overstatement (Understatement)

Balance Sheet:

Merchandise inventory understated

(31115)

Current assets understated

(31115)

Total assets understated

(31115)

Stock holder’s equity understated

(31115)

Income Statement:

Cost of merchandise sold overstated

31115

Gross profit understated

(31115)

Net Income understated

(31115)

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