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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 $80,000 $96,000 Cost of goods purchased 640,000 672,000 Cost of goods available for sale 720,000 768,000 Ending inventory 96,000 88,000 Cost of goods sold $624,000 $680,000 The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $12,800 2. Year 2 ending inventory was overstated by $6,400 Compute the correct cost of goods sold for both years.

Errors in Inventory Counts The following information was taken from the records of Tinker Enterprises: Year 1 Year 2 Beginning Inventory $80,000 $96,000 Cost of goods purchased 640,000 672,000 Cost of goods available for sale 720,000 768,000 Ending inventory 96,000 88,000 Cost of goods sold $624,000 $680,000 The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $12,800 2. Year 2 ending inventory was overstated by $6,400 Compute the correct cost of goods sold for both years.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
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 $80,000 $96,000 Cost of goods purchased 640,000 672,000 Cost of goods available for sale 720,000 768,000 Ending inventory 96,000 88,000 Cost of goods sold $624,000 $680,000 The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $12,800 2. Year 2 ending inventory was overstated by $6,400 Compute the correct cost of goods sold for both years.
Transcribed Image Text:Errors in Inventory Counts The following information was taken from the records of Tinker Enterprises: Year 1 Year 2 Beginning Inventory $80,000 $96,000 Cost of goods purchased 640,000 672,000 Cost of goods available for sale 720,000 768,000 Ending inventory 96,000 88,000 Cost of goods sold $624,000 $680,000 The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $12,800 2. Year 2 ending inventory was overstated by $6,400 Compute the correct cost of goods sold for both years.
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