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Citrin Corporation reported the following information related to 20X7 and 20X8: 20X7 20X8 Beginning inventory $ 634,400 $ 530,400 Purchases 1,899,990 2,450,500 Cost of goods

Citrin Corporation reported the following information related to 20X7 and 20X8:
20X7 20X8
Beginning inventory $ 634,400 $ 530,400
Purchases 1,899,990 2,450,500
Cost of goods available for sale $ 2,534,390 $ 2,980,900
Less: Ending inventory 530,400 480,000
Cost of goods sold $ 2,003,990 $ 2,500,900
Sales $ 3,003,990 $ 4,500,900
Cost of goods sold 2,003,990 2,500,900
Gross profit $ 1,000,000 $ 2,000,000
The 20X7 ending inventory value used in the above presentation erroneously failed to include $200,000 of goods purchased FOB shipping point. The purchase and related accounts payable were correctly recorded by Citrin Corporation. Citrin Corporation uses a periodic inventory system.
(a)

Prepare a corrected presentation of the above data.

*PLEASE EXPLAIN WHAT CHANGES MUST OCCUR WHEN YOU SOLVE THE ERROR

(b)

Prepare a corrected presentation of the above data, but this time assume that the company had also failed to record the purchase before 20X8 (in addition to omitting the $200,000 from 20X7 ending inventory).

*PLEASE EXPLAIN WHAT CHANGES MUST OCCUR WHEN YOU SOLVE THE ERROR

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