The accountant for Steele Company reported the following accounting treatments for several purchase transactions (FOB shipping point) that took place near December 31, 2012, the company€™s year-end:

Required:
1. If Steele Company€™s records reported purchases and ending inventory balances of $80,800 and $29,800, respectively, for 2012, what would the proper amounts in these accounts have been?
2. What would be the correct amount of cost of goods sold for 2012, if the beginning inventory balance on January 1, 2012, was $20,200?
3. By how much would cost of goods sold be over- or understated if the corrections in question (1) were notmade?

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Was the Purchase Recorded in the Books on or before December 31, 2012? Was the Inventory Counted and Included in Inventory Balance on December 31, 2012? Date Inventory Was Shipped Amount 2012 December 26 December 29 December 3l 2013: January 1 Yes $1,100 1,800 Yes 3,000 January I