Mountain Pool Supplies€™ merchandise inventory data for the year ended December 31, 2017, follow:

Requirements
1. Assume that the ending merchandise inventory was accidentally overstated by $1,300. What are the correct amounts for cost of goods sold and gross profit?
2. How would the inventory error affect Mountain Pool Supplies cost of goods sold and gross profit for the year ended December 31, 2018, if the error is not corrected in 2017?

Transcribed Image Text:

Sales Revenue S 46,000 Cost of Goods Sold: Beginning Merchandise Inventory Net Cost of Purchases Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold S3,500 30,000 33,500 5,400 28,100 Gross Profit 17,900