Refer back to the Boston Cycles’ inventory data in Short Exercise 6-11.
Requirement
1. How would the inventory error affect Boston Cycles’ cost of goods sold and gross profit for the year ended December 31, 2012, if the error is not corrected in 2011?

Data From Short Exercise 6-11:

Boston Cycles’ inventory data for the year ended December 31, 2011, follow:

Assume that the ending inventory was accidentally overstated by $2,200.

Transcribed Image Text:

Sales revenue... $ 46,000 Cost of goods sold: Beginning inventory ...... $5,400 Net purchases ... 26,700 Cost of goods available 32,100 Less: Ending inventory Cost of goods sold Gross profit (3,600) 28,500 $ 17,500