Calculate inventory errors. (LO 8)
Tire Pro Company’s records reported the following at the end of the fiscal year.
|
Beginning inventory |
$ 80,000 |
|
Ending inventory |
85,000 |
|
Cost of goods sold |
295,000 |
A physical inventory count showed that the ending inventory was actually $78,000. If this error is not corrected, what effect would it have on the income statement for this financial year and the following fiscal Year?