Cole Company uses the LCNRV method, on an individual item basis, in pricing its inventory...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Cole Company uses the LCNRV method, on an individual item basis, in pricing its inventory items. The inventory at December 31, 2017, included product Z. Relevant per-unit data for product Z appear below.
Estimated selling price
$ 51
Cost
41
Replacement cost
39
Estimated selling expenses
14
Normal profit
9
There were 3,500 units of product Z on hand at December 31, 2017. Product Z was incorrectly valued at $ 39 per unit for reporting purposes. All 3,500 units were sold in 2018. Compute the effect of this error on net income for 2017 and the effect on net income for 2018, and indicate the direction of the misstatement for each year.
Effect of net income for 2017
$ enter a dollar amount
Effect of net income for 2018
$ enter a dollar amount
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
