Question: Company reported the income statement data for 2010, 2011 2010 2011 sales 280,000 320,000 Cost of goods sold beginning inentory 32,000 44,000 cost of gods

Company reported the income statement data for 2010, 2011

2010 2011

sales 280,000 320,000

Cost of goods sold

beginning inentory 32,000 44,000

cost of gods purchased 193,000 225,000

cost of goods available for sale 225,000 269,000

ending inventory 44,000 52,000

cost of goods sold 181,000 217,000

Gross profic 99,000 103,000

company uses a periodic inventroy system. the inventories at 1.1.2010 and 12.31 2011 are correct. however, the ending inventory at 12.31.2010 was overstated 5000

a. prepare correct income statement data for the 2years.

b. what is the cumulative effect of the inventory error on total gross profit for the 2 years?

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