During the taking of its physical inventory on December 31, 2014, Zula Company i

Question

During the taking of its physical inventory on December 31, 2014, Zula Company incorrectly counted its inventory as $331,675 instead of the correct amount of $305,140. Indicate the effect of the misstatement on Zula's December 31, 2014, balance sheet and income statement for the year ended December 31, 2014. Also record the amount of each overstatement or understatement. Enter all amounts as positive number.

Cost of merchandise sold $

Current assets $

Gross profit $

Merchandise inventory $

Net income $

Owner's equity $

Total assets $

Explanation / Answer

During the taking of its physical inventory on December 31, 2014, Zula Company i

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