How should the disposal of a component of a business be disclosed in the income statement?
ACCY 331, Week 6, CH8 Valuation of Inventories Example: Inventory Errors Assume that, at the end of 2017, the accountant of Cooper Corp. forgot to count $1,000 of goods when it performed the annual inventory count. o This error went undetected through 2018. o What effect would this error have on the financial statements for 2017 and 2018 o To analyze, use the inventory formula and the balance sheet formula. Note that the asset account in inventory error analysis is ending inventory, and the equity effect is retained earnings, specifically the effect on net income o Analysis (ignore the amount, it is the same throughout the analysis): U=Unders tated U
