Rulix Watch agency reported the following income explain data because that a 2-year period.
You are watching: What is the cumulative effect of the inventory error on total gross profit for the 2 years?
Cost of items sold
Cost of products purchased
Cost that goods available for sale
Cost of goods sold
Rulix offers a periodic inventory system. The inventories at January 1, 2013, and also December 31, 2014, space correct. However, the ending inventory in ~ December 31, 2013, was overstated $6,000.
(a) Prepare correct income statement data for the 2 years.
(b) What is the cumulative result of the perform error on full gross profit for the 2 years?
(c) define in a letter to the chairman of Rulix Watch firm what has actually happened, i.e., the nature of the error and also its impact on the gaue won statements.
Jan 27 2021 05:41 PM
1 authorized Answer
Sanjeet kanswered ~ above January 29, 2021
SOLUTION:-Ending inventory in ~ December 31, 2018 is overstated by $6000.It should have been $38000 (instead of offered amount that $44000). As soon as we correct this error, the will result in palliation of gross profit by $6000. Brand-new gross profit in 2018 will certainly be $53000.When the ending inventory in ~ December 31, 2018 is overstated by $6000, it will certainly mean...
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