What will be effect of overstating the beginning inventory

Assignment Help Financial Management
Reference no: EM131027077

Alpha Company's beginning inventory should have been $85,000, but instead, the bookkeeper listed it as $95,000. The manager told the bookkeeper not to "worry" about the mistake, because it would resolve itself in the following year.

What will be the effect of overstating the beginning inventory?

Should the bookkeeper be concerned with the manager's advice?

Reference no: EM131027077

Questions Cloud

The international fisher effect holds : Assume that the U.S. one-year interest rate is 5% and the one-year interest rate on euros is 8%. You have $100,000 to invest and you believe that the international Fisher effect (IFE) holds. The euro's spot exchange rate is $1.40. What will be the yi..
The spot exchange rate of an australian dollar : Assume that the U.S. one-year interest rate is 3% and the one-year interest rate on Australian dollars is 6%. The U.S. expected annual inflation is 5%, while the Australian inflation is expected to be 7%. You have $100,000 to invest for one year and ..
After supply and demand for the japanese yen : The inflation rate in the U.S. is 4%, while the inflation rate in Japan is 1.5%. The current exchange rate for the Japanese yen (¥) is $0.0080. After supply and demand for the Japanese yen has adjusted according to purchasing power parity, the new ex..
What is its net interest margin : Suppose a bank earns $325 million in interest revenue but pays $279 million in interest expense. It also has $624 million in earning assets. What is its net interest margin?
What will be effect of overstating the beginning inventory : Alpha Company's beginning inventory should have been $85,000, but instead, the bookkeeper listed it as $95,000. The manager told the bookkeeper not to "worry" about the mistake, because it would resolve itself in the following year. What will be the ..
What will be the resulting percentage change in ebit : The Poseidon Swim company produces swim trunks. The average selling price for one of their swim trunks is $69.14. The variable cost per unit is $25.90, Poseidon Swim has average fixed costs per year of $6,839. Assume that current level sales is 367 u..
The resulting percentage change in earnings per share : Use the following information about Rat Race Home Security,  Average selling price per unit $301. Variable cost per unit $190. Based on the data above, what will be the resulting percentage change in earnings per share of Rat Race Home Security, Inc...
In a period of heightened price volatility-what is a buyback : In a period of heightened price volatility, the beta of the market will: What is a buyback? What is a bank?
What is effective annual cost of firms current practice : justo Ltd buys on terms 1.5/10, net 30 days. It does not take discounts, but it typically pays 20 days after the invoice date, instead of waiting until Day30. Justso can borrow from the bank at a rate of 18% per annum. If justso is notaking discounts..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the value three years from now

A 4-year annuity of eight $6,600 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now. If the discount rate is 10 percent compounded monthly, what is the value of this annuity five years from now? If the d..

  What is the firms current estimated intrinsic stock price

Your employer, a mid-sized human resources management company, is considering expansion into related fields, including the acquisition of Temp Force Co. an employment agency that supplies word processor operators and computer programmers to business ..

  What is the firms cost of equity

Tina Fashions is expected to pay an annual dividend of $1.10 a share next year. The market price of the stock is $21.80 and the growth rate is 4.5 percent. What is the firm's cost of equity?

  What is the total intrinsic value of the bond

Suppose that Firm Y has bonds outstanding that mature in 12 years and offer a 6.5 percent annual coupon rate, paid semiannually. Market required returns on similar bonds are 6.25 percent annual. What is the return of principal component of this bond’..

  Covered interest arbitrage

Covered Interest Arbitrage. Assume the following information: Quoted Price Spot rate of Canadian dollar $.80 90-day forward rate of Canadian dollar $.79 90-day Canadian interest rate 4% 90-day U.S. interest rate 2.5% 1- Given this information, what w..

  Investment account for purpose of buying equipment four year

One year ago, the Jenkins Family Fun Center deposited $4,000 in an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $5,800 to this account. They plan on making a final deposit of $8,000 ..

  Mortgage lenders base the mortgage interest rate

Mortgage lenders base the mortgage interest rate they offer you on your credit rating. This makes it financially critical to maintain a credit score of 700 or higher. How much more interest would you pay on a $207,000 home if you put 20% down and fin..

  Cost of common equity based on the constant-growth model

You have obtained the following data for a firm: (1) Rd = yield on the firm's bonds = 7.00% and the risk premium over its own debt cost = 4.00%. (2) Rf = 3.00%, RPM = 6.00%, and beta = 1.25. (3) D0 = $1.20, P0 = $35.00, and g = 6.00% (constant). You ..

  Business borrows-what will be the annual payment required

A business borrows $308,965 for 11 years at an annual rate of interest of 8.7%. If payments are annual and the loan will negatively amortize by $45,571, what will be the annual payment required? Put your answer in as a positive number.

  Use straight-line depreciation to zero over projects life

You are evaluating two different silicon wafer milling machines. The Techron I costs $249,000, has a three-year life, and has pretax operating costs of $66,000 per year. The Techron II costs $435,000, has a five-year life, and has pretax operating co..

  Your firm purchases goods from its supplier on terms

Your firm purchases goods from its supplier on terms of 2.2/ 15, net 30. What is the effective annual cost to your firm if it chooses not to take the discount and makes its payment on day 30? What is the effective annual cost to your firm if it choos..

  Supply and demand analysis and marginal analysis

Discuss why both supply and demand analysis and marginal analysis must be used in making rational business decisions. Please include specific examples in your discussion posts. Also include the difference between substitutes and complements and the d..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd