Madison river supply co. sells canoes, kayaks, whitewater rafts, and other boating supplies. during the taking of its physical inventory on december 31, 20y8, madison incorrectly counted its inventory as $545,000 instead of the correct amount of $555,400. a. state the effects of the error on the december 31, 20y8, balance sheet of madison river supply.

Due to the error in the recording of correct amount of inventory the ,at the end of Madison river supply balance sheet , the inventory , current assets, total assets and shareholders equity would be understated by $10,400.

Now due to the error in recording correct amount of inventory , in the balance sheet it will be shown as understated by $10,400 ( $555,400 - $5454,000 ) , now because of this the current assets would become understated by the same amount as inventory comes under the current assets.

Since current assets are understated , the total assets of the company would also be understated and so do shareholders equity as the net income has decreased because of the increase in cost of goods sold.

answer; i believe the answer is (facework);

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.