Determine the effect that the errors will have

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Question -

You have been asked to audit the financial statements of Williams Company and report on your findings.

After examining the beginning and ending inventory counts and calculations for the current year, you find the following: Beginning inventory is overstated by $2,700.

Ending inventory is overstated by $13,000.

Management of the company wants to know the effect that the errors will have on certain financial statement items.

Required -

Ignoring income taxes, determine the effect that the errors will have on the following:

Cost of good: over or understated and what is the amount of the error?

Ending inventory: over or understand and what is the amount of the error?

Reference no: EM132618920

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