Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the...
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Accounting
Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2016, Missouri River Supply incorrectly counted its inventory as $233,400 instead of the correct amount of $238,600.
Enter all amounts as positive numbers.
a. State the effect of the error on the December 31, 2016, balance sheet of Missouri River Supply.
Balance Sheet Items
Understated / Overstated
Amount
Merchandise Inventory
Understated
$??
Current Assets
Understated
$??
Total Assets
Understated
$??
Owner's Equity
Understated
$??
b. State the effect of the error on the income statement of Missouri River Supply for the year ended December 31, 2016.
Income Statement Items
Overstated / Understated
Amount
Cost of Merchandise Sold
Overstated
$??
Gross Profit
Understated
$??
Net Income
Understated
$??
c. If uncorrected, what would be the effect of the error on the 2017 income statement?
Income Statement Items
Overstated / Understated
Amount
Cost of Merchandise Sold
Understated
$ ??
Gross Profit
Overstated
$ ??
Net Income
Overstated
$ ??
Answer & Explanation
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