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7 Jan 2018
The CFO of the Jordan Microscope Corporation intentionallymisclassified a downstream transportation expense in the amount of$575,000 as a product cost in an accounting period when the companymade 5,000 microscopes and sold 4,000 microscopes. Jordan rewardsits officers with bonuses that are based on net earnings.
Required
Indicate whether the elements on the financial statements (i.e.,assets, liabilities, equity, revenue, expense, and net income)would be overstated or understated as a result of themisclassification of the downstream transportation expense.Determine the amount of the overstatement or understatement foreach element. (If there is no effectselect "Not affected" from the dropdown provided. Enter all answersas positive values.)
The CFO of the Jordan Microscope Corporation intentionallymisclassified a downstream transportation expense in the amount of$575,000 as a product cost in an accounting period when the companymade 5,000 microscopes and sold 4,000 microscopes. Jordan rewardsits officers with bonuses that are based on net earnings.
Required
Indicate whether the elements on the financial statements (i.e.,assets, liabilities, equity, revenue, expense, and net income)would be overstated or understated as a result of themisclassification of the downstream transportation expense.Determine the amount of the overstatement or understatement foreach element. (If there is no effectselect "Not affected" from the dropdown provided. Enter all answersas positive values.)
Trinidad TremblayLv2
9 Jan 2018
