Randwick Ltd Has a Year-End of 30 June 2009 B)

question 1

Multiple Choice

Randwick Ltd has a year-end of 30 June 2009.During the year the following errors were discovered. - Merchandise inventory at the factory had been understated by $44 000.
- Goods on consignment from a supplier for $13 000 were included in inventory at the shops.
- Physical inventory for one warehouse had a shortage of $58 000.
What is the net effect of above errors in the statement of comprehensive income and statement of financial position (inventory) accounts of Randwick Ltd?

• A)
• \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Increase } & \text { Increase } \\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Decrease } & \text { Increase } \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Decrease } & \text { Decrease } \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Increase } & \text { Decrease } \\
• \hline
• \end{array}\]

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Definitions:

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