Sophia and Julia were passionate about skiing. Unfortunately, the two girls didnt make the cut for the Olympic Canadian Ski team so they decided to pursue this passion by opening their own ski shop, Rise&Glide.

Part 1:

In 2017, Rise&Glide has a beginning inventory of 150 pairs of skis, at a per-pair cost of $130. During the year, Rise&Glide made the following purchases and sales:

Transactions	Units (in pairs)	Retail Price (per pair)
Purchase 1	340
Sale 1	280	$420
Purchase 2	120
Sale 2	250	$480

	Purchase 1	Purchase 2
Cost per pair of skis	$180	$160

1. Rise&Glide uses periodic inventory system and FIFO cost assumption. Determine the cost of goods sold, ending inventory, and gross margin for the fiscal year 2017.

2. At the end of 2017, the net realizable value of each ski becomes $150. Determine if Rise&Glides inventory need a write-down, and if so, provide the journal entry.

Part 2:

In the mid of 2018, the company realized that Bertha, their accountant, accidently recorded the inventory at the end of 2017 using weighted average cost instead of FIFO.

1. How does this error affect COGS and net income for 2017 and 2018 (ignore the write-down)?

BONUS question: Provide the correcting journal entry.