Question: New York Pool Supplies’s merchandise inventory
New York Pool Supplies’s merchandise inventory data for the year ended December 31, 2019, follow:
Requirements:
1. Assume that the ending merchandise inventory was accidentally overstated by $1,800. What are the correct amounts for cost of goods sold and gross profit?
2. How would the inventory error affect New York Pool Supplies’s cost of goods sold and gross profit for the year ended December 31, 2020, if the error is not corrected in 2019?
Transcribed Image Text:
Net Sales Revenue $ 58,000 Cost of Goods Sold: Beginning Merchandise Inventory $ 4,900 Net Cost of Purchases 32,500 Cost of Goods Available for Sale 37,400 Less: Ending Merchandise Inventory 4,700 Cost of Goods Sold 32,700 Gross Profit $ 25,300
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