Glacier Fishing Gear reported the following amounts for its cost of goods sold and ending inventory:

Glacier made two errors: (1) 2023 ending inventory was overstated by $5,500, and (2) 2024 ending inventory was understated by $4,000.

Instructions
a. Calculate the correct cost of goods sold and ending inventory for each year.
b. Describe the impact of the errors on profit for 2023 and 2024 and on owner’s equity at the end of 2023 and 2024.
c. Explain why it is important that Glacier Fishing Gear correct these errors as soon as they are discovered.

Transcribed Image Text:

Cost of goods sold Ending inventory 2024 $170,000 30,000 2023 $175,000 30,000