Brown Brotherss income statements for the past 3 years are as shown: 2015 2016 2017 Net sales

Question:

Brown Brothers’s income statements for the past 3 years are as shown:




2015


2016


2017

Net sales



$68000




$78000



$70000

Beginning inventory

Net purchases



16000

30000




14000

36000



20000

22000

Goods available for sale

Ending inventory



46000

14000




50000

20000



42000

12000

Cost of sales



32000




30000



30000

Gross profit

Other expenses



36000

16000




48000

14000



40000

19000

Profit



$20000



$

$34000



$21000

Because of errors, the 2015 Ending inventory is understated by $2000 and the 2016 Ending inventory is overstated by $6000. The 2017 Ending inventory is correct.


Required

A. Determine the correct amount of profit for each of the 3 years.

B. Determine the total profit for the 3-year period as shown and as corrected.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Accounting

ISBN: 978-1118608227

9th edition

Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett

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