James Supply Company Reports Net Income of $120000 in 2016

question 198

Essay

James Supply Company reports net income of $120000 in 2016. The ending inventory did not include goods valued at $9000 that James had consigned to Eli's Gift Shop.
(1) What is the correct net income for 2016?
(2) What impact will this error have on the balance sheet at 12/31/16?

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Definitions:

Pooled Two-sample T Procedure

A statistical method that combines variances from two samples to test for a difference in means when the variances are assumed to be equal.

Two-sample T Procedures

Statistical methods used to compare the means of two independent groups under the assumption of normally distributed populations.

One-sample T Procedures

Statistical tests used to determine whether the mean of a single sample differs significantly from a known or hypothesized population mean.

Confidence Interval

An interval estimate used to quantify the uncertainty of an estimated population parameter.