Exercise 5-12 Analysis of inventory errors LO A2Vibrant Company had $1,090,000 of sales in each of Year 1, Year 2, and Year 3, and it purchased merchandise costing $595,000 ineach of those years. It also maintained a $390,000 physical inventory from the beginning to the end of that three-year period. Inaccounting for inventory, it made an error at the end of Year 1 that caused its Year 1 ending inventory to appear on its statements as$370,000 rather than the correct $390,000.Required:1. Determine the correct amount of the company's gross profit in each of Year 1, Year 2, and Year 3.2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit foreach of Year 1, Year 2, and Year 3.Complete this questions by entering your answers in the below tabs.Required 1Required 2Determine the correct amount of the company's gross profit in each of Year 1, Year 2, and Year 3.VIBRANT COMPANYComparative Incóme StatementsYear 1Year 2Year 33-year totalCost of goods soldCost of goods soldGross profit orkSavedaccounting for inventory, it made an error at the end of Year 1 that caused its Year 1 ending inventory to appear on its statements as$370,000 rather than the correct $390,000.Required:1. Determine the correct amount of the company's gross profit in each of Year 1, Year 2, and Year 3.2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit foreach of Year 1, Year 2, and Year 3.Complete this questions by entering your answers in the below tabs.Required 1Required 2Determine the correct amount of the company's gross profit in each of Year 1, Year 2, and Year 3.VIBRANT COMPANYComparative Income StatementsYear 1Year 2Year 33-year totalCost of goods soldCost of goods soldGross profit< Required 1Required 2 >

The income statement explains the financial performance of the company for a particular period of…

Exercise 5-12 Analysis of inventory errors LO A2 Vibrant Company had $1,090,000 of sales in each of Year 1, Year 2, and Year 3, and it purchased merchandise costing $595,000 each of those years. It also maintained a $390,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of Year 1 that caused its Year 1 ending inventory to appear on its statements $370,000 rather than the correct $390,000. Required: 1. Determine the correct amount of the company's gross profit in each of Year 1, Year 2, and Year 3. 2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit each of Year 1, Year 2, and Year 3.

Exercise 5-12 Analysis of inventory errors LO A2 Vibrant Company had $1,090,000 of sales in each of Year 1, Year 2, and Year 3, and it purchased merchandise costing $595,000 each of those years. It also maintained a $390,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of Year 1 that caused its Year 1 ending inventory to appear on its statements $370,000 rather than the correct $390,000. Required: 1. Determine the correct amount of the company's gross profit in each of Year 1, Year 2, and Year 3. 2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit each of Year 1, Year 2, and Year 3.

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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