2017 2016 $250,900 $198,630 38,880 31,990 185,130 167,190 224,010 199,180 60,210

Question

2017

2016

$250,900

$198,630

38,880

31,990

185,130

167,190

224,010

199,180

60,210

38,880

163,800

160,300

$87,100

$38,330

2016

2017

Coronado Industries reported these income statement data for a 2-year period.

2017

2016

Sales revenue

$250,900

$198,630

Beginning inventory

38,880

31,990

Cost of goods purchased

185,130

167,190

Cost of goods available for sale

224,010

199,180

Less: Ending inventory

60,210

38,880

Cost of goods sold

163,800

160,300

Gross profit

$87,100

$38,330

Coronado Industries uses a periodic inventory system. The inventories at January 1, 2016, and December 31, 2017, are correct. However, the ending inventory at December 31, 2016, is overstated by $7,440.

Explanation / Answer

2016 2017 Sales 198630 250900 Cost of goods sold    Beginning inventory 31990 31440    Cost of goods purchased 167190 185130    Cost of goods available for sale 199180 216570 Less: Ending inventory 31440 60210 Cost of goods sold 167740 156360 Gross profit 30890 94540 2 The cumulative effect on total gross profit for the two years is $0

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