Question - A company's manager's estimating for completion rate for ending WIP for Direct material and conversion are been overstated.
Reported by manager: 74% completed for Direct Material, 26% completed for conversion costs, Actually: 50% done with material and 5~6% done with conversion
Under the overstating issue,
What effect will the issue have on the company's financial statement?
What effects might the company have on the company's taxes?