Due to ineffective controls while counting its inventory. Walker & Comer. Inc.. double-counted...

Question

Due to ineffective controls while counting its inventory. Walker & Comer. Inc.. double-counted $50.000 of inventory at the end of the current year. Before discovering this error. the company's ending inventory was $ XXXXXXXXXXHow will correction of this error affect the company's inventory and cost of goods sold figures?

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David · Accepted Answer

Answer 
A)  Compute the Corrected Net Income for 2010 and 2011
 Answer; 
               The inventory for the year 2010 was understated due to this his 
income was less by $40,000. Therefore the corrected income for the year 
2010 will be $250,000 +$ 40,000 = $290,

Due to ineffective controls while counting its inventory. Walker & Comer. Inc.. double-counted $50.000 of inventory at the end of the current year. Before discovering this error. the company's ending...

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