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 | 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 InventoryThe 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 =...
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett