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Assume that Whisper Company failed to write down inventory to lower of cost or net realizable...

Assume that Whisper Company failed to write down inventory to lower of cost or net realizable value at the end of 2017, and the related goods were sold in 2018. Ignoring taxes, what effect would this error have on the following items? (circle your answer for each, 8 points in total)

  1. Net Income for 2017          INCREASE           DECREASE             NO EFFECT
  1. Net income for 2018          INCREASE           DECREASE             NO EFFECT         

  1. Cash Flow from                  INCREASE           DECREASE             NO EFFECT
    Operations for 2017

  1. Retained Earnings at          INCREASE           DECREASE             NO EFFECT
    year-end 2018
Business   Accounting   
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