HCI, Inc. understated its ending inventory by $6,000 in 2006. Assume HCI, Inc. h

Question

HCI, Inc. understated its ending inventory by $6,000 in 2006. Assume HCI, Inc. has a 25 percent income tax rate. Which of the following statements about the financial reports of HCI, Inc. for 2006 is correct? Answer Ending inventory will be overstated by $4,500. Ending inventory will be understated by $4,500. Cost of sales will be overstated by $1,500. Net income will be understated by $4,500. HCI, Inc. understated its ending inventory by $6,000 in 2006. Assume HCI, Inc. has a 25 percent income tax rate. Which of the following statements about the financial reports of HCI, Inc. for 2006 is correct? HCI, Inc. understated its ending inventory by $6,000 in 2006. Assume HCI, Inc. has a 25 percent income tax rate. Which of the following statements about the financial reports of HCI, Inc. for 2006 is correct? Ending inventory will be overstated by $4,500. Ending inventory will be understated by $4,500. Cost of sales will be overstated by $1,500. Net income will be understated by $4,500. Ending inventory will be overstated by $4,500. Ending inventory will be understated by $4,500. Cost of sales will be overstated by $1,500. Net income will be understated by $4,500.

Explanation / Answer

Ending inventory will be understated by $4,500.

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