1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lesya692 [45]
3 years ago
5

At december​ 31, 2018​,stevenson company overstated ending inventory by​ $36,000. how does this error affect cost of goods sold

and net income for 2018​?
Business
1 answer:
jarptica [38.1K]3 years ago
5 0

The Cost of Good Sold is $36,000 lower than it should have been and the net income is $36,000 higher than it should have been.

There are two formulas that are important to know for this question. The first is Beg. Inventory + Purchases - Ending Inventory = COGS. The second formula is Sales - Cost of Good Sold = Gross Profit.

If you reported a higher ending inventory it is going to result in a lower value for Cost of Good Sold. In this case the company had too high of an ending inventory by $36,000, which mean that the COGS is $36,000 lower than actual.

When you have a COGS that is lower than it should be you are going to have a gross profit which is overstated. The Income is overstated by $36,000.

You might be interested in
Debt is frequently incurred when plant assets are acquired. For example, debt may be incurred on the purchase of plant assets. D
Olenka [21]

Answer:

A. capitalize capitalize

Explanation:

All the expenses incurred to make the asset usable are capitalized and those expenses become the part of cost of that assets for which that are incurred. Interest on debt to purchase an asset and in case to construct the asset both are capitalized, because these expenses are essential to make assets usable for the business.

6 0
3 years ago
An increase in the price of a good causes a decline in demand for A. inferior goods. B. its substitutes. C. normal goods. D. its
ivolga24 [154]

Answer:

D. its complements.

Explanation:

A complement is a good or service used in conjuncture with another good. Therefore, if there is a decrease in the demand for a particular good, its complements will also see a decrease in demand. By the general supply and demand rule, an increase in the price of a good causes a decline in its demand and, therefore, causes a decline in demand for its complements.

6 0
3 years ago
A compound transaction was recorded as follows: debit Equipment, $5,000; debit Cash, $1500; credit Accounts Payable, $3,500. Thi
butalik [34]
The trial balance would disagree. It seems that the cash should be credited instead as the situation seems to me that the cash is being expended to pay for the equipment, and the remaining 3500 is liabilities. Therefore, the error should be corrected.
7 0
3 years ago
Companent of business studies​
Solnce55 [7]

Answer:

Its study combines elements of accountancy, finance, marketing, organizational studies and economics. Business Studies is a broad subject in the Social Sciences, allowing the in-depth study of a range of specialties such as accountancy, finance, organisation, human resources management and marketing.

8 0
4 years ago
If you were to try to associate Project Management with the traditional functions of Supply Chain Management, A. Project Managem
MakcuM [25]

Answer:

B. Project Management encompasses all the functions of Supply Chain: Plan-Buy-Make-Deliver

Explanation:

A project can involve any aspect of logistics, e.g. building a new distribution facility, or installing an automated warehouse, etc. The main difference between project management and supply chain management is the lifespan of the work carried out. A project has a definite lifespan, e.g. a new facility must be built and it should start operating within 2 years. While operations management requires continuous day to day work, e.g. after the new facility is operating, the supply chain manager will be in charge of supply chain operations. It is normal that a supply chain manager is part of the team that handles new projects, but his/her work continues after the project is over.

4 0
3 years ago
Other questions:
  • Stuart wishes to have $14,000 to buy a used car three years from now. He plans to accomplish this, through an account with a nom
    5·1 answer
  • One year ago, a U.S. investor converted dollars to yen and purchased 100 shares of Nardasausau stock in a Japanese company at a
    10·1 answer
  • A Japanese company has a bond outstanding that sells for 85 percent of its ¥100,000 par value. The bond has a coupon rate of 4.4
    8·1 answer
  • Scott filed for Chapter 13 bankruptcy in 2010. Even if he planned to take the maximum time allowed under Chapter 13 to repay his
    7·2 answers
  • The demand curve for corn is downward sloping. If the price of corn, an inferior good, falls, then A) the income effect which ca
    14·1 answer
  • Most informational reports are written a. using a formal writing style. b. for a neutral or receptive audience. c. using the ind
    8·1 answer
  • The Windsong Automobile Manufacturing Company produces custom luxury​ automobiles, The owner recognizes the importance of happy
    14·1 answer
  • The following questions highlight how changes in numbers can be measured in both absolute and relative percentage terms. Two sto
    7·1 answer
  • During the first month (April 20--), the following transactions occurred.
    9·1 answer
  • A person should consume more of something when its marginal.
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!