Inventory errors (Learning Objective 6) 10–15 min.

Old Time Bakery reported sales revenue of $134,000 and cost of goods sold of $89,000.

Requirements 1. Compute Old Time Bakery’s correct gross profit assuming the company’s ending inventory is overstated by $1,100. Show your work.

2. Compute Old Time Bakery’s correct gross profit assuming the company’s ending inventory is understated by $2,200. Show your work.

AppendixLO1