Addis Ababa UniversitySchool of Commerce, Accounting & FinanceProgram UnitPrinciples of Accounting-IIIndividual AssignmentGeneral Directions:1. Read theinstructionscarefully for each part of the question andattempt accordingly.2. Make sure that the Assignment consists of# 6 pagesincludingthe cover page.3. Show yourcomputationsclearly for appropriate questions.4. Since it is individual assignment,copying from each otheristotally prohibited.5. Do not forget to write yourName, Id number and Section(including base section for add students)on your hand-written answer sheet. (i.e. file to be attached either in MS-Wordand/or PDF form).6. Add students should attach the copy of theirregistration slipindicating their current and base section along with their answersheet.7. A hand-written answer for the questions should be submitted viayour respective class representativesa week before the start ofthe final exam.8. Warning: Only hand-written answers are accepted and thedead-line must be strictly observed.
Part I: Accounting for InventoryQuestion-1: Effect of Error in determining inventoryMintz Company discovers in 2012 that its ending inventory at December 31,2019, was $7,000 understated. What effect will this error have on (a) 2019 netincome, (b) 2020 net income, and (c) the combined net income for the 2 years?Question-2: Inventory Costing MethodsAssume the following data forGG Business Groupfor the month of January.PurchaseSalesDateQuantityUnit CostTotal CostDateQuantityJan 1.200$7$1,400Jan.610081,10088,80092002530092,7001540030400104,00027600Total2,000$16,900Total1,300Additional InformationA physical count on January 31 shows 300 units on hand (of which 60 unitsfrom beginning inventory are in ware house; 70 units from January 8purchase are placed on a display shelf; and 170 units from January 25purchases are held by a consignee) and 400 units purchased under the FOBShipping Point agreement are on transit at the end of the month.Required:1-DetermineEnding Inventory Cost & Cost ofGoods Soldunder the PeriodicInventory System by using the following inventory costing methodsa)SpecificIdentificationb)FIFOc)Average CostingSeek wisdom, elevate your intellect and serve humanity!