rs in Inventory Counts The following information was taken from the records of S
ID: 2546445 • Letter: R
Question
rs in Inventory Counts The following information was taken from the records of Spencer Enterprises: LO3 2016 2015 55,000 75,000 540,000500,000 Beginning inventory Cost of goods available for sale. Cost of goods sold. The following two errors were made in the physical inventory counts: ...5 595,000 575,000 55,000 . 85,000 . . $510,000 $520,000 1. 2015 ending inventory was overstated by $30,000. 2. 2016 ending inventory was understated by $18,000. Compute the correct cost of goods sold for both 2015 and 2016.Explanation / Answer
Correct Inventory account for the year 2015 is-
Therefore closing inventory will be= $55,000-$30,000
=$25,000
And cost of goods sold =
opening inventory + purchase- closing inventory .
$75,000+5,00,000-25,000
$5,50,000
Correct inventory account for the year 2016 is-
Closing inventory for year 2015 will be opening balance of 2016.
Therefore closing inventory=$85,000+$18,000
=$1,03,000
Cost of goods sold=opening bal+cost of purchase-end bal.
$25,000+$5,40000-$1,03,000
$4,62,000
INVENTORY A/C Particular Amount Particular Amount To opening inventory $75,000 By cost of goods sold $5,50,000 To Cost of goods Purchased $5,00,000 By end Inventory $25,000 $5,75,000 $5,75,000Related Questions
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