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  • Several Years Ago The Financial Statements of Gibson Greeting Cards PDF

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    Taimour Hassan
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    Gibson Greeting Cards discovered that its ending inventory for a year was overstated by $8.8 million. With a 39.3% tax rate, Gibson's reported net earnings of $25.8 million for that year would be reduced to $16 million after correcting for the inventory error. If uncorrected, inventory and net income would be overstated for the year of the error and retained earnings would be overstated the following year.

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    Gibson Greeting Cards discovered that its ending inventory for a year was overstated by $8.8 million. With a 39.3% tax rate, Gibson's reported net earnings of $25.8 million for that year would be reduced to $16 million after correcting for the inventory error. If uncorrected, inventory and net income would be overstated for the year of the error and retained earnings would be overstated the following year.

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    © All Rights Reserved
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    27 views1 page

    Several Years Ago The Financial Statements of Gibson Greeting Cards PDF

    Uploaded by

    Taimour Hassan
    Gibson Greeting Cards discovered that its ending inventory for a year was overstated by $8.8 million. With a 39.3% tax rate, Gibson's reported net earnings of $25.8 million for that year would be reduced to $16 million after correcting for the inventory error. If uncorrected, inventory and net income would be overstated for the year of the error and retained earnings would be overstated the following year.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Several years ago the financial statements of Gibson

    Greeting Cards #995


    Several years ago, the financial statements of Gibson Greeting Cards (now owned by American
    Greetings Corporation) contained the following note:On July 1, the Company announced that it
    had determined that the ending inventory . . . had been overstated . . . The overstatement of
    inventory . . . was $ 8,806,000.Gibson reported net earnings of $ 25,852,000 for the year in
    which the error occurred, and its income tax rate was 39.3 percent.Required:1. Compute the
    amount of net earnings that Gibson reported after correcting the inventory error. Show
    computations.2. Assume that the inventory error was not discovered. Identify the financial
    statement accounts that would have been incorrect for the year the error occurred and for the
    subsequent year. State whether each account was understated or overstated.View Solution:
    Several years ago the financial statements of Gibson Greeting Cards

    ANSWER
    http://paperinstant.com/downloads/several-years-ago-the-financial-statements-of-gibson-
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