Answer and Explanation:
According to the scenario, The presentation of the given data are as follows:-
Partial Income Statement
Particular Quarter 1 amount ($) Quarter 2 amount ($) Quarter 3 amount ($) Quarter 4 amount ($)
Net Sales 60,000 59,000 80,000 68,000
Cost of sold goods 24,000 23,600 32,000 26,520
Gross Profit 36,000 35,400 48,000 41,480
($32,450 + $2,950) ($50,950 - $2,950)
Quarter 2 was understated by $2,950 at the end of the inventory.
Quarter 2 cost of sold goods
= Cost of sold goods - understated amount
= $26,550 - $2,950
= $23,600
Quarter 3 cost of sold goods
= Cost of sold goods + understated amount
= $29,050 + $2,950
= $32,000
