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If you plug in some numbers for the calculations. Let's say Beginning Inventory was initially $200,000 and they purchased $80,000 and had Ending Inventory of $20,000. That would make the year 2 Ending be the $260,000 in the problem. If $18,000 was missed in the count for year one that would change the $200,000 to $218,000 and if $7,000 was counted twice, it would make the corrected ending inventory $13,000. With the new numbers, $218,000 + $80,000 - $13,000 = $285,000. But the listed answer is $235,000. Is this question wrong or am I missing something.
For this question, the explanation says the amount of revenue should be decreased by an estimated amount until the return period expires, however, how can this be done if the company cannot estimate the amount of returns? Why isn't the answer option C?
Agreed the fair value of investment was 209000 at end of year 1. But the Investment should be 211000 after adding Net income, subtracting dividends. There is obviously a 2000 loss attributable to stock price (Fair value) Losses are taken Immediatly, why isn't the loss taken in Year 1? My answer, "0" change in Y2 cause i say the loss should be taken y1. Explain