Multiple Choice
During 2016,P Company discovered that the ending inventories reported on its financial statements were incorrect by the following amounts:
2014 $120,000 understated
2015 150,000 overstated
P uses the periodic inventory system to ascertain year-end quantities that are converted to dollar amounts using the FIFO cost method.Prior to any adjustments for these errors and ignoring income taxes,P's retained earnings at January 1,2016,would be:
A) Correct.
B) $ 30,000 overstated.
C) $150,000 overstated.
D) $270,000 overstated.
Correct Answer:
Verified
Correct Answer:
Verified
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