Effects Of Inventory Errors
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Title: Effects Of Inventory Errors

Essay Details:

Subject: Business
Date: July 24, 2015
Level: University
Grade: A
Length: 2 / 352

Essay text:

Before the correction of the error in income statements for Uncle Bill’s Home Improvement Center, the combined net income for 2002 and 2003 is $ 68,500+ $32,900 = $101,400. Meanwhile, the combined net income for 2002 and 2003 after correction of the error is $ 45,000+ $56,400 = $101,400. In addition, net income in 2003 ($ 32,900) is lower than 2002 ($ 68,500) even though sales in 2003 ($541,200) is higher than 2002 ($ 523,600). Ending inventory is self counting so as long as the physical count is made properly in the second year. By properly excluding the goods held on consignment at the end of 2003, the error was collected and no further action was necessary in 2004...

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