Determine the amount of the overstatement or understatement

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Problem

The CFO of the Benson Microscope Corporation intentionally misclassified a downstream transportation expense in the amount of $706,800 as a product cost in an accounting period when the company made 9,300 microscopes and sold 7,400 microscopes. Benson rewards its officers with bonuses that are based on net earnings. Required a. Indicate whether the components of the financial statements (i.e., assets, liabilities, stockholders' equity, revenue, expense, and net income) would be overstated or understated as a result of the misclassification of the downstream transportation expense. Get the instant assignment help. Determine the amount of the overstatement or understatement for each element.

Reference no: EM133901584

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