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Financial Accounting

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Inventory Errors: Beginning Inventory, Under COGS, and Net Income

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Spring Corporation uses a Periodic Inventory System and reports Merchandising Inventory on the Balance Sheet at \$241,000 on December 31, 2017, \$224,000 on December 31, 2016, and \$235,000 on December 31, 2015.

While preparing the December 31, 2017 Balance Sheet, Spring realizes that a portion of its Inventory is held on consignment at Brown Company. This Inventory costing \$6,000 is not included in the Merchandise Inventory balance at December 31, 2016. The Inventory amounts reported at the end of 2017 and 2015 are correct.