Answer:
2013: $490,000 2012: $561,000
Question:
Errors in inventory count the following information was taken from the record of Spencer Enterprises
<u> 2013 </u> <u>2012 </u>
Beginning Inventory $63,000 $83,000
Cost of goods purchased <u> $548,000</u> <u>$508,000</u>
Cost of goods available for sale $611,000 $591,000
Ending inventory <u> $93,000 </u> <u>$63,000</u>
Cost of goods sold <u> $518,000</u> <u>$528,000</u>
The following two errors were made in the physical inventory counts:
1. 2012 ending inventory was overstated by $33,000
2. 2013 ending inventory was understated by $28,000.
Compute the correct cost of goods sold for both 2012 and 2013.
Explanation:
Computation of cost of goods sold for the year 2016 and 2015
Particulars <u>2013 </u> <u>2012 </u>
Beginning inventory $63,000 $83,000
Cost of goods purchased <u>$548,000</u> <u>$508,000</u>
Cost of goods available for sale $611,000 $591,000
Ending inventory <em>(corrected)</em> <u> $121,000</u> <u>$30,000</u>
Cost of goods sold <em>(corrected) </em> <u>$490,000</u> <u>$561,000</u>.
<u>note:</u>
<em>In 2013 new ending inventory = $93,000 + $28,000 = $121,000</em>
<em>In 2012 new ending inventory = $63,000 - $33,000 = $30,000</em>
<em>Beginning inventory + Cost of goods purchased = Cost of goods available for sale</em>
<em>Cost of goods available for sale - Ending inventory = Cost of goods sold</em>
