Question
Assume that you have the following informations extracted from the Trial balance at 31.12.2019: Inventory $24,800 Sales $190,000 Sales return and allowances $14,000 Sales discount
Assume that you have the following informations extracted from the Trial balance at 31.12.2019:
| Inventory | $24,800 |
| Sales | $190,000 |
| Sales return and allowances | $14,000 |
| Sales discount | $11,000 |
| Cost of goods purchased | $93,000 |
| Operating expenses | $16,600 |
Assume that at the end of 2018 the company had $19,000 inventory on hand.
Assume that the ending inventory of 2019 is understated by 1400$
Calculate Net sales
Calculate the correct Cost of goods sold
Calculate the correct gross profit
Calculate the correct Net income
What is the effect of the inventory error on: (equity, assets and Retained earnings)?
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Financial Reporting and Analysis Using Financial Accounting Information
Authors: Charles H. Gibson
13th edition
1285401603, 1133188796, 9781285401607, 978-1133188797
