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Harlan Enterprises manufactures smart phones. Currently, Harlan has $14,000 in raw materials and $25,000 in finished goods in its warehouse. It also has $18,600 in work-in-process goods on its assembly line. Harlan erroneously includes the work-in-process goods as part of finished goods inventory, listing work-in-process inventory as $0. What effect with this have on Harlan’s total inventory?

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jepessoa

Answer:

It will have no impact on the total inventory.

Explanation:

inventory account includes raw materials, finished goods and work in process goods.

  • inventory = $14,000 (raw materials) + $25,000 (finished goods) + $18,600 (work in process) = $57,600
  • inventory = $14,000 (raw materials) + $43,600 (finished goods) + $0 (work in process) = $57,600

the total amount doesn't change

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