By mistake, the accountant at Talisman recorded $15,000 as ending inventory for Year 1. What will be the amount of gross profit reported in Year 2 because of the error?
$15,000 will be the amount of gross profit reported in year 2 because of the error.
Explanation:
For year 1, the accountant at Talisman recorded $15,000 as ending inventory by mistake. After that also talisman didn't recognize that it was a mistake. It was entered into the records.
Same as the first year $15000 was entered as inventory for the second year. Because of the error entered in the first year records were inserted into the second year. So this is the amount of gross profit reported in year 2.
