The Carson Company Was Started at the Beginning of the Current

Essay

The Carson Company was started at the beginning of the current year when it acquired $20,000 by issuing common stock to its owners.During the year,the company incurred the following cash costs:
$\begin{array}{lr}\text { Direct material costs } & \$ 10,000 \\\text { Direct labor costs } & 8,000 \\\text { Overhead costs } & 4,000 \\\text { Selling and administrative costs } & 2,000\end{array}$ The company produced 5,000 units of product and sold 4,500 units.The average selling price was $7.00 per unit.The accountant who prepared the firm's financial statements misclassified the selling and administrative costs as product costs.
Required:
Demonstrate the impact of the error on the company's financial statements by completing the following schedule.