The following information was taken from the records of Tinker Enterprises: Year 1 Year 2 Beginning Inventory $50,000 $60,000 Cost of goods purchased 400,000 420,000 Cost of goods available for sale 450,000 480,000 Ending inventory 60,000 55,000 Cost of goods sold $390,000 $425,000 The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $8,000 2. Year 2 ending inventory was overstated by $4,000
The following information was taken from the records of Tinker Enterprises: Year 1 Year 2 Beginning Inventory $50,000 $60,000 Cost of goods purchased 400,000 420,000 Cost of goods available for sale 450,000 480,000 Ending inventory 60,000 55,000 Cost of goods sold $390,000 $425,000 The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $8,000 2. Year 2 ending inventory was overstated by $4,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Errors in Inventory Counts
The following information was taken from the records of Tinker Enterprises:
| Year 1 | Year 2 | |
|---|---|---|
| Beginning Inventory | $50,000 | $60,000 |
| Cost of goods purchased | 400,000 | 420,000 |
| Cost of goods available for sale | 450,000 | 480,000 |
| Ending inventory | 60,000 | 55,000 |
| Cost of goods sold | $390,000 | $425,000 |
The following two errors were made in the physical inventory counts:
1. Year 1 ending inventory was understated by $8,000
2. Year 2 ending inventory was overstated by $4,000
Compute the correct cost of goods sold for both years.
| Year 1 | Year 2 | |
|---|---|---|
| Cost of goods sold | Answer
|
Answer
|
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