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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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