Question - Manufacturing Company engaged in five transactions involving inventory at the end of 2014
1) Ordered 50,000 inventory on Dec 29 2014. Goods shipped on Dec 30 2014, with terms FOB Shipping point. Goods received on Jan 4 2015.
2) Received order to sell inventory with cost of 40,000.Goods shipped to customer on Dec 31 2014 and received on Jan 3 2015. Terms of sale were FOB shipping point.
3) Received order to sell inventory with cost of 15,000.Goods shipped to customer on Dec 29 2014 and received on Jan 2 2015. Terms of sale were FOB Destination.
4) Ordered 10,000 inventory on Dec 27 2014. Goods shipped on Dec 27 2014 , with terms FOB Destination. Goods received on Dec 31 2014.
5) Ordered 75,000 inventory on Dec 30 2014. Goods shipped on Dec 31 2014 , with terms FOB Destination. Goods received on Jan 3 2015.
Assume manufacturing company included in inventory (12/31/2014) all items from five cases above. Explain how the resulting financial statements would be misstated.