Use this information to answer the following question. $$\begin{array} { | l | r | r | }
\hline \text { Accaunt Name } & { \text { Debit } } & { \text { Credit } } \
\hline \text { Sales } & & 300,000 \
\hline \text { Sales Returns and Allowances } & 10,000 & \
\hline \text { Purchases } & 68,000 & \
\hline \text { Purchases Returns and Allowances } & &8 , 0 0 0 \
\hline \text { Freight-In } & 12,000 & \
\hline \text { Selling Eagenses } & 30,000 & \
\hline \text { General and Adninictrative Eagenses } & 110,000 & \
\hline
\end{array}$$ In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
If beginning and ending merchandise inventories were ignored in computing net income,then net income would be

Question

Use this information to answer the following question. $$\begin{array} { | l | r | r | } 
\hline \text { Accaunt Name } &  { \text { Debit } } & { \text { Credit } } \
\hline \text { Sales } & & 300,000 \
\hline \text { Sales Returns and Allowances } & 10,000 & \
\hline \text { Purchases } & 68,000 & \
\hline \text { Purchases Returns and Allowances } & &8 , 0 0 0  \
\hline \text { Freight-In } & 12,000 & \
\hline \text { Selling Eagenses } & 30,000 & \
\hline \text { General and Adninictrative Eagenses } & 110,000 & \
\hline
\end{array}$$ In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
If beginning and ending merchandise inventories were ignored in computing net income,then net income would be

Quizplus · Accepted Answer

Ignoring the change in inventory would result in an overstatement of net income by the amount of the decrease in inventory, which is $22,000 - $14,000 = $8,000.

Use This Information to Answer the Following Question In Addition,beginning Merchandise Inventory Was $22,000 and Ending Merchandise Inventory