Question: Determining the Financial Statement Effects of Inventory Errors Repeat problem, except assume the 2007 ending inventory was overstated by $100,000.
Problem: Determining the Financial Statement Effects of Inventory Errors Assume the 2007 ending inventory of Shea's Shrimp Shack was understated by $10,000. Explain how this error would affect the amounts reported for cost of goods sold and gross profit for 2007 and 2008.