Glacier made two errors: (1) 2016 ending inventory was overstated by $5,500, and (2) 2017 ending inventory was understated by $4,000.

Instructions

(a) Calculate the correct cost of goods sold and ending inventory for each year.

(b) Describe the impact of the errors on profit for 2016 and 2017 and on owner's equity at the end of 2016 and 2017.

(c) Explain why it is import ant that Glacier Fishing Gear correct these errors as soon as they are discovered.