ent CALCULATOR FULL SCREEN. PR Brief Exercise 6-11 Nickels Company reports net i

Question

ent CALCULATOR FULL SCREEN. PR Brief Exercise 6-11 Nickels Company reports net income of $84,540 in 2014. However, ending inventory was understated by $7,280. What is the correct net income for 2014? The correct net income s SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO What effect, if any, will this error have on total assets as reported in the balance sheet at December 31, 2014 ) in the balance sheet will be by the amount that ending inventory is SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Question Attempts: 0 of 3 used SAVE FOR LATER menthestagliot.niasaenmtia1neaaights Reserved. A Division of ugen/sharedjassignment/testjogist.uniid asnmt13118 acBook Air

Explanation / Answer

Ending inventory understated means cost of goods sold has been overstated. So net income and gross profit have been understated.

So net income should be increased by the amount of ending inventory understated.

Netincome is 84,540+7,280 = 91,820

Correct net income for 2014 is 91,820

Current assets in the balance sheet will be understated by the amount inventory understated. 7,280

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