Nash Jewelry reported the following income statement data for a 2-year period. ...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Nash Jewelry reported the following income statement data for a 2-year period.
2019
2020
Sales revenue
HK$2,130,000
HK$2,540,000
Cost of goods sold
Beginning inventory
344,000
441,000
Cost of goods purchased
1,730,000
2,161,000
Cost of goods available for sale
2,074,000
2,602,000
Ending inventory
441,000
538,000
Cost of goods sold
1,633,000
2,064,000
Gross profit
HK$497,000
HK$476,000
Nash uses a periodic inventory system. The inventories at January 1, 2019, and December 31, 2020, are correct. However, the ending inventory at December 31, 2019, was understated HK$70,000.
A/ Prepare correct income statement data for the 2 years.
B/ What is the cumulative effect of the inventory error on total gross profit for the 2 years?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
