12) The following inventory data are from the records of Hobo Widget Company: Beginning inventory $100,000 Ending inventory $70,000 Cost of goods sold $230,000 A physical inventory count revealed that the inventory was actually $75,000. If this error were not corrected, what effect would it have on the income statements for this fiscal year and the following fiscal year? 13) Records for the Short Company showed the following at the end of the year: Beginning inventory $10,000 Ending inventory 30,000 Cost of goods sold 80,000 A physical inventory was taken and showed that the ending inventory was actually $29,000. Required: Put an X in the appropriate box to show the effect the error will have on the following financial statement line items for the year if Short Company fails to correct it: Overstated Understated Correct 1 Current assets 2 Current liabilities 3 Cost of goods sold 4 Gross profit 5 Income taxes 6 Retained earnings

12) The following inventory data are from the records of Hobo Widget Company: Beginning inventory $100,000 Ending inventory $70,000 Cost of goods sold $230,000 A...

12) The following inventory data are from the records of Hobo Widget Company:

Beginning inventory	$100,000
Ending inventory	$70,000
Cost of goods sold	$230,000

A physical inventory count revealed that the inventory was actually $75,000. If this error were not corrected, what effect would it have on the income statements for this fiscal year and the following fiscal year?

13) Records for the Short Company showed the following at the end of the year:

Beginning inventory	$10,000
Ending inventory	30,000
Cost of goods sold	80,000

A physical inventory was taken and showed that the ending inventory was actually $29,000.

Required:
Put an X in the appropriate box to show the effect the error will have on the following financial statement line items for the year if Short Company fails to correct it:

		Overstated	Understated	Correct
1	Current assets
2	Current liabilities
3	Cost of goods sold
4	Gross profit
5	Income taxes
6	Retained earnings

May 15, 2022

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12) The following inventory data are from the records of Hobo Widget Company: Beginning inventory $100,000 Ending inventory $70,000 Cost of goods sold $230,000 A...

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