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Pina Colada Corporation uses the lower of FIFO cost and net realizable value method on...

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Accounting

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Pina Colada Corporation uses the lower of FIFO cost and net realizable value method on an individual item basis, applying the direct method. The inventory at December 31, 2022, included product AG. Relevant per-unit data for product AG follow: There were 1,800 units of product AG on hand at December 31, 2022. Product AG was incorrectly valued at $41 per unit for reporting purposes. All 1,800 units were sold in 2023. Assume that Pina Colada follows ASPE, and answer the following questions. Was net income for 2022 overstated or understated? By how much? (Ignore income tax aspects.) Net income for 2022 is by $ Was net income for 2023 overstated or understated? By how much? Net income for 2023 is by $ Indicate whether the current ratio, inventory turnover ratio, and debt to total assets ratio would be overstated, understated, or not affected for the years ended December 31, 2022, and December 31, 2023

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