At the balance sheet date, Clarkson Company held title to goods in transit amounting to $214,000. 1 answer below »

At the balance sheet date, Clarkson Company held title to goods in transit amounting to $214,000. This amount was omitted from the purchases figure for the year and also from the ending inventory. What is the effect of this omis- sion on the net income for the year as calculated when the books are closed? What is the effect on the company’s fi- nancial position as shown in its balance sheet? Is material- ity a factor in determining whether an adjustment for this item should be made?

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