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Solution_to_Unit_8_Textbook_Exercises

# Solution_to_Unit_8_Textbook_Exercises - \$(9,000 Current...

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PE 7–3A a. Cost of merchandise sold (August 30): \$760 = (20 units × \$38) b. Inventory, August 31: 13 units @ \$34 \$442 2 units @ \$38 76 15 \$518 PE 7–4A a. First-in, first-out (FIFO) method: \$720 = (20 units × \$36) b. Last-in, first-out (LIFO) method: \$540 = (12 units × \$25) + (8 units × \$30) c. Average cost method: \$645 (20 units × \$32.25), where average cost = \$32.25 = \$2,580/80 units PE 7–6A Amount of Misstatement Overstatement (Understatement) Balance Sheet: Merchandise inventory understated
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Unformatted text preview: ............ \$(9,000) Current assets understated. .......................... (9,000) Total assets understated. ............................... (9,000) Owner’s equity understated. .......................... (9,000) Income Statement: Cost of merchandise sold overstated. .......... \$ 9,000 Gross profit understated. ............................... (9,000) Net income understated. ................................ (9,000)...
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