Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. fonda motorcycle shop sells motorcycles, atvs, and

Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking...

80.2K

Verified Solution

Question

Accounting

Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31,20Y8, Fonda Motorcycle Shop incorrectly counted its inventory as $268924 instead of the correct amount of $236724.
Enter all amounts as positive numbers.
Answer:
a. State the effect of the error on the December 31,20Y8, balance sheet of Fonda Motorcycle Shop.
\table[[Balance Sheet Item,Overstated/Understated,Amount (Put in as positive)],[Merchandise Inventory,,],[Current Assets,,],[Total Assets,,],[Owner's Equity,,]]
b. State the effect of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31,20Y8.
\table[[Income Statement Item,Overstated/Understated,Amount (put in as a positive number)],[Cost of Merchandise Sold,,],[Gross Profit,,],[Net Income,,]]
image

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!
Become a Member

Other questions asked by students