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If the ending inventory of a firm is overstated by $54,000, by how much and in what direction (overstated or understated) will the firm's operating
If the ending inventory of a firm is overstated by $54,000, by how much and in what direction (overstated or understated) will the firm's operating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect the effects of the ending inventory error and determine the effect on cost of goods sold.) Operating income by Refer to the following mentioned data. Net sales Cost of products sold Gross margin (In millions) 2017 2016 2015 $34,419 $30,077 $26,534 14,175 13,629 13,789 $20, 244 $16,448 $12,745 Required: a. Calculate the gross profit ratio for each of the past three years. (Round your answers to 2 decimal places.) 2017 2016 % 2015 % b. Assume that Campbell's net sales for the first four months of 2018 totaled $12.77 billion. Calculate an estimated cost of goods sold and gross profit for the four months, using the gross profit ratio for 2017. (Round intermediate calculations to 2 decimal places. Enter your answers in millions rounded to nearest whole number (i.e., 5,000,000 should be entered as 5).) Cost of goods sold Gross profit million million
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