Question
Glacier Fishing Gear reported the following amounts for its cost of goods sold and ending inventory: 2024 2023 Cost of goods sold $170,000 $175,000 Ending
Glacier Fishing Gear reported the following amounts for its cost of goods sold and ending inventory:
2024
2023
Cost of goods sold $170,000 $175,000
Ending inventory 30,000 30,000
Glacier made two errors: (1) 2023 ending inventory was overstated by $5,500, and (2) 2024 ending inventory was understated by $4,000. Instructions
Calculate the correct cost of goods sold and ending inventory for each year. Describe the impact of the errors on profit for 2023 and 2024 and on owners equity at the end of 2023 and 2024. Explain why it is important that Glacier Fishing Gear correct these errors as soon as they are discovered.
Prepare correct income statements.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started