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Effect of Errors in Physical Inventory Fonda Motorcycle Shop selis motorcycles, ATVs, and other related...

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Effect of Errors in Physical Inventory Fonda Motorcycle Shop selis motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory an December 31, 20Y8, Fonda Motorcycle Shop incorrectiy counted its inventory as $215,230 instead of the correct amount of $206,620. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop. 1/4 21723,63man Cengagenowr2 : Ovire leachng and iewring resoure from Cengage Leaming b. State the effect of the error on the income statement of Fonda Notorcycie shop for the year ended December 31, 20r8. c. If uncorrected, what would be the effect of the error on the 20Y9 income statement? d. If uncorrected, what would be the affect of the error on the Decernber 31, 20Y9, balance sheet? 1. The December 31,20Y9, balance sheet would be correct, since the 20Y8 inventory error reverses itself in 20y9. 2. The December 31, 20Y9, balance sheet would be incorrect, since the 20 Y8 inventory error understates the inventory in 20Y9. 3. The December 31,20Y9, balance sheet would be incorrect, since the 20YB inventory error overstates the inventory in 209

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