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1. If the Ending Inventory is under-estimated, the Gross Profit will decrease_____
a) TRUE
- FALSE
2. If the Beginning Inventory is under-estimated, the Net Income will decrease______
a) TRUE
- FALSE
3. If the Ending Inventory is over-estimated, the Gross Profit will decrease_____
a) TRUE
- FALSE
4. If the Beginning Inventory is over-estimated, the Net Income will decrease_____
a) TRUE
- FALSE
$ $ $ S S UNDER-ESTIMATION of ENDING and BEGINNING INVENTORY Jack's COLA - Inventory 2018 Incorrect Correct Sales $ 80,000.00 80,000.00 Beginning Inventory $ 20.000.00 $ 20,000.00 Cost of Goods Purchased S 40.000.00 $ 40.000.00 Cost of Goods Available $ 60,000.00 $ 60,000.00 Ending Inventory 12.000.00 15,000.00 Cost of Goods Sold $ 48.000.00 S 45,000.00 GROSS PROFIT $ 32,000.00 $ 35,000.00 Operating Expenses $ 10,000.00 $ 10,000.00 NET INCOME $ 22.000.00 $ 25,000.00 2019 Incorrect 90,000.00 $ 12,000.00 68.000.00 $ 80,000.00 $ S 23,000.00 $ 57,000.00 $ $ 33,000.00 $ $ 20,000.00 $ $ 13,000.00 $ Correct 90,000.00 15,000.00 68.000.00 83,000.00 23,000.00 60,000.00 30,000.00 20,000.00 10.000.00 S S $ $ $ $ S OVER-ESTIMATION of ENDING and BEGINNING INVENTORY Jack's COLA - Inventory 2018 Incorrect Correct Sales $ 80,000.00 $ 80,000.00 Beginning Inventory 20,000.00 $ 20,000.00 Cost of Goods Purchased S 40.000.00 $ 40,000.00 Cost of Goods Available $ 60,000.00 $ 60,000.00 Ending Inventory 15,000.00 $ 12,000.00 Cost of Goods Sold $ 45,000.00 S 48,000.00 GROSS PROFIT $ 35,000.00 $32,000.00 Operating Expenses 10,000.00 $ 10,000.00 NET INCOME 25,000.00 S 22,000.00 S $ $ S $ $ $ 2019 Incorrect 90,000.00 $ 15,000.00 68,000.00 83,000.00 $ 23,000.00 60,000.00 $ 30,000.00 $ 20,000.00 10,000.00 S Correct 90,000.00 12,000.00 68.000.00 80,000.00 23,000.00 57. 000.00 33,000.00 20,000.00 23,000.00 $ $
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