Inventory Errors Haywood Inc. reported the following information for Year 1: Beginning inventory Ending inventory Sales revenue Cost of goods sold $25,000 50,000 1,000,000 620,000 A physical count of inventory at the end of the year showed that ending inventory was actually $65,000. Required: 1. What is the correct cost of goods sold and gross profit for Year 17 Cost of goods sold Gross profit 2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, Year 17 At December 31, Year 2? December 31, Year 1 December 31, Year 2
Inventory Errors Haywood Inc. reported the following information for Year 1: Beginning inventory Ending inventory Sales revenue Cost of goods sold $25,000 50,000 1,000,000 620,000 A physical count of inventory at the end of the year showed that ending inventory was actually $65,000. Required: 1. What is the correct cost of goods sold and gross profit for Year 17 Cost of goods sold Gross profit 2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, Year 17 At December 31, Year 2? December 31, Year 1 December 31, Year 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Inventory Errors
Haywood Inc. reported the following information for Year 1:
Beginning inventory
Ending inventory
Sales revenue
Cost of goods sold
A physical count of inventory at the end of the year showed that ending inventory was actually $65,000.
Required:
$25,000
50,000
1,000,000
620,000
1. What is the correct cost of goods sold and gross profit for Year 1?
Cost of goods sold
Gross profit
2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, Year 1? At December 31, Year 2?
December 31, Year 1
December 31, Year 2
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