Redford Company Hired a New Store Manager in October 2011,who

question 62

Essay

Redford Company hired a new store manager in October 2011,who determined the ending inventory on December 31,2011,to be $50,000.In March,2012 the company discovered that the December 31,2011 ending inventory should have been $58,000.The December 31,2012,inventory was correct.Ignore income taxes.
Complete the following table to show the effects of the inventory error on the four amounts listed.Give the amount of the discrepancy and indicate whether it was overstated (O),understated (U),or had no effect (N). $$\begin{array}{l}\begin{array} { l } \text { Year } \quad \text { Ending Inventory } &\text { Cost of Goods Sold }&\text { Net Income } \\2011 \\2012\end{array}\\\end{array}$$

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Definitions:

Greenhouse Gases

Gases in Earth's atmosphere, such as carbon dioxide, methane, and water vapor, that trap heat and contribute to global warming.

Excessive Pollution

The presence of contaminants in the environment at levels that are harmful to living organisms and natural ecosystems.

Nonrenewable

Describes resources, such as fossil fuels or minerals, that cannot be replenished within a human lifespan when consumed.

Increased Methane

Increased methane refers to the rise in concentration of methane gas in an environment, which can significantly contribute to greenhouse gas effects and global warming.