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Magazine Chapter 6: 36PGB_1 (page 371)
Question:Antique Carpets鈥檚 books show the following data. In early 2020, auditors found that the ending merchandise inventory for 2017 was understated by \(8,000 and that theending merchandise inventory for 2019 was overstated by \)9,000. The ending merchandiseinventory at December 31, 2018, was correct.
2019 | 2018 | 2017 | |
Net Sales Revenue | \( 212,000 | \) 161,000 | \( 170,000 |
Cost of Goods Sold: | |||
Beginning Merchandise Inventory | \)22,000 | \(28,000 | \)41,000 |
Net cost of purchase | 131,000 | 100,000 | 86,000 |
Cost of goods available for sale | 153,000 | 128,000 | 127,000 |
Less: Ending Merchandise Inventory | 34,000 | 22,000 | 28,000 |
Cost of goods sold | 119,000 | 106,000 | 99,000 |
Gross Profit | 93,000 | 55,000 | 71,000 |
Operating Expenses | 63,000 | 28,000 | 39,000 |
Net Income | \( 30,000 | \) 27,000 | $ 32,000 |
Requirements
1. Prepare corrected income statements for the three years.
Short Answer
Correct figures for 2017, 2018, and 2019 -
2017 | 2018 | 2019 | |
Opening Inventory | - | $36,000 | - |
Ending Inventory | $36,000 | - | $25,000 |
COGS | $91,000 | $114,000 | $128,000 |
Gross Profit | $79,000 | $47,000 | $84,000 |
Net Income | $40,000 | $19,000 | $21,000 |
Step by step solution
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