Hci inc. understated its ending inventory by 6000 in 2006., Ask an Expert

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HCI, Inc. understated its ending inventory by $6,000 in 2006. Assume HCI, Inc. has a 25 percent income tax rate. Which of the following statements about the financial reports of HCI, Inc. for 2006 is correct?

a) Ending inventory will be overstated by $4,500.

b) Ending inventory will be understated by $4,500.

c) Cost of sales will be overstated by $1,500.

d) Net income will be understated by $4,500.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M947752

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