Delhi Hardware reported cost of goods sold as follows. Delhi made two errors: (1

Question

Delhi Hardware reported cost of goods sold as follows.

Delhi made two errors: (1) 2013 ending inventory was overstated $2,530, and (2) 2014 ending inventory was understated $6,230.

Compute the correct cost of goods sold for each year.

Correct Cost of goods sold for 2013 -----

Correct cost of goods sold for 2014 -----

2013
2014 Beginning inventory
$ 24,150
$ 33,470 Cost of goods purchased
153,910
195,680 Cost of goods available for sale
178,060
229,150 Ending inventory
33,470
39,780 Cost of goods sold
$144,590
$189,370

Explanation / Answer

In YEAR 2013,

correct ending inventory will be equal to 33,470 - 2,530 = $ 30,940

Correct Cost of goods sold for 2013 = 178,060 - 30,940 = $ 147,120

In year 2014,

correct ending inventory will be equal to 39,780 + 6230 = $ 46,010

Correct Cost of goods sold for 2013 = 189,370 - 46,010 = $ 143,360

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