Aruba Company reported the following income statement data for a 2-year period.

Aruba uses a periodic inventory system. The inventories at January 1, 1998, and December 31, 1999, are correct. However, the ending inventory at December 31,1998 , was overstated \(\$ 6,000\).
\section*{Instructions}

(a) Prepare correct income statement data for the 2 years.

(b) What is the cumulative effect of the inventory error on total gross profit for the 2 years?
pened-i.e., the nature of the error and its effect on the financial statements.

Transcribed Image Text:

1998 1999 Sales $210,000 $250,000 Cost of goods sold Beginning inventory 32,000 40,000 Cost of goods purchased 173,000 202,000 Cost of goods available for sale 205,000 242,000 Ending inventory 40,000 52,000 Cost of goods sold 165,000 190,000 Gross profit $ 45,000 $ 60,000