Mount ValleyMount Valley

Bakery reported net sales revenue of

$ 37 comma 000$37,000

and cost of goods sold of

$ 11 comma 000$11,000.

Compute

Mount Valley'sMount Valley's

correct gross profit if the company made either of the following independent accounting errors.

a.Ending merchandise inventory is overstated by

$ 3 comma 000$3,000.

b.Ending merchandise inventory is understated by

$ 3 comma 000$3,000.

		Cost of Goods Sold and Gross Profit
		Corrected for the Error
		Ending Merchandise Inventory:
	As Reported	(a) Overstated	(b) Understated
	Incorrect	by $3,000	by $3,000
Net sales revenue	$37,000	$37,000	$37,000
Cost of goods sold	11,000
Gross profit