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A retailer completed a physical count of ending merchandise inventory. When counting inventory, employees did not include $2,600 of incoming goods shipped by a supplier on December 31 under FOB shipping point. These goods had been recorded in Merchandise Inventory, but they were not included in the physical count because they were in transit. This means shrinkage was incorrectly overstated by $2,600. Problem 1: Compute the amount of overstatement or understatement for each of the following amounts for this period.
Financial Statement Analysis and Preparation
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