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poizon [28]
3 years ago
10

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.
Business
1 answer:
timofeeve [1]3 years ago
3 0

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>

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