Accounting 350, Summer 2009 Name
Quiz #4, Chpts. 8 & 9
1. Bell Inc. took a physical inventory at the end of the year and determined that $650,000 of
goods were on hand. In addition, Bell, Inc. determined that $50,000 of goods that were
in transit that were shipped f.o.b. shipping were actually received two days after the
inventory count and that the company had $75,000 of goods out on consignment. What
amount should Bell report as inventory at the end of the year?
a. $650,000.
b. $700,000.
c. $725,000.
d. $775,000.
Use the following information for question 2.
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2011 and
2010 contained errors as follows:
2011 2010
Ending inventory $3,000 overstated $8,000 overstated
Depreciation expense $2,000 understated $6,000 overstated
2. Assume that no correcting entries were made at December 31, 2010. Ignoring income
taxes, by how much will retained earnings at December 31, 2011 be overstated or
understated?
