Montpellier Company discovered that in its 2019 financial statements, the 2019 ending inventory was overstated by $12,000 and that the 2019 beginning inventory was overstated by $7,000. Before correcting these errors, Montpellier had reported $110,000 of pre-tax income.
What should Montpellier report as the correct 2019 pre-tax income? (Hint: Determine separately the effect of each of the two errors on pre-tax income, and then determine the net effect of the two.)
The answer has been presented in the supporting sheet/ For detailed answer refer to the supporting sheet.
Get Answers For Free
Most questions answered within 1 hours.