In 2010 Townsend Inc Discovered That Its Ending Inventory in 2009

question 7

Multiple Choice

In 2010 Townsend Inc discovered that its ending inventory in 2009 was too big by $95,000.How much will Townsend'ss beginning retained earnings (Jan.1,2010) need to be adjusted to correct this error given a tax rate of 30%.

• A)Increase retained earnings $66,500
• B)Do not adjust retained earnings
• C)Decrease retained earnings by $95,000
• D)Decrease retained earnings $66,500.

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Definitions:

Limited Partnership

A business structure with at least one general partner who manages the business and assumes unlimited liability, and one or more limited partners who provide capital and have limited liability.

Limited Partnership

A partnership structure where at least one partner has unlimited liability (general partner) and one or more partners have limited liability (limited partners), restricting their losses to their investment in the partnership.

Limited Liability Partnership

A business structure where partners have limited liabilities, protecting personal assets from the debts of the business.

Sole Proprietorship

A sole proprietorship is a business owned and operated by a single individual, where there is no legal separation between the owner and the business entity.