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Instructions: (a) Calculate the correct cost of goods sold and gross profit for 2020 and (b) Calculate the inventory turnover for 2020 and 2021 using the correcte

Instructions: (a) Calculate the correct cost of goods sold and gross profit for 2020 and (b) Calculate the inventory turnover for 2020 and 2021 using the correcte

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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Ginger Auto Parts reported the following information in its income statement for 2020 and 2021: Sales Cost of goods sold Beginning inventory Cost of goods purchased Cost of goods available for sale Ending inventory 2021 $ 126,000 Paragraph V B I 8,000 90,000 98,000 (10,000) 88,000 $ 38,000 Uv 2020 $ 119,000 Gross profit While completing Ginger's 2020 financial statements, the accountant realized that errors had been made in previous years' inventory calculations. The correct ending inventory at December 31, 2019 was $6,000, the correct ending inventory at December 31, 2020 was $4,000, and the correct ending inventory at December 31, 2021 was $7,000. Instructions: (a) Calculate the correct cost of goods sold and gross profit for 2020 and for 2021. (b) Calculate the inventory turnover for 2020 and 2021 using the corrected information. A/ 5,000 70,000 75,00 (8,000) 67,000 $2,000 V Y OV 0⁰ + v ***
Transcribed Image Text:Ginger Auto Parts reported the following information in its income statement for 2020 and 2021: Sales Cost of goods sold Beginning inventory Cost of goods purchased Cost of goods available for sale Ending inventory 2021 $ 126,000 Paragraph V B I 8,000 90,000 98,000 (10,000) 88,000 $ 38,000 Uv 2020 $ 119,000 Gross profit While completing Ginger's 2020 financial statements, the accountant realized that errors had been made in previous years' inventory calculations. The correct ending inventory at December 31, 2019 was $6,000, the correct ending inventory at December 31, 2020 was $4,000, and the correct ending inventory at December 31, 2021 was $7,000. Instructions: (a) Calculate the correct cost of goods sold and gross profit for 2020 and for 2021. (b) Calculate the inventory turnover for 2020 and 2021 using the corrected information. A/ 5,000 70,000 75,00 (8,000) 67,000 $2,000 V Y OV 0⁰ + v ***
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