entory on December 31, 2016, Fonda Motorcycle Shop incorrectly counted its inventory as $337,500 instead of the correct amount of $328,850.
Enter all amounts as positive numbers.
a. State the effect of the error on the December 31, 2016, balance sheet of Fonda Motorcycle Shop.
Balance Sheet Items Understated / Overstated Amount
Merchandise Inventory Overstated $
Current Assets Overstated $
Total Assets Overstated $
Owner's Equity Overstated $
b. State the effect of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 2016.
Income Statement Items Understated / Overstated Amount
Cost of Merchandise Sold Understated $
Gross Profit Overstated $
Net Income Overstated $
c. If uncorrected, what would be the effect of the error on the 2017 income statement?
Income Statement Items Understated / Overstated Amount
Cost of Merchandise Sold Overstated $
Gross Profit Understated $
Net Income Understated $