Errors in Inventory Counts

The following information was taken from the records of Tinker Enterprises:

Year $1$ Year $2$

Beginning Inventory $$50,000$ $$60,000$

Cost of goods purchased $400,000420,000$

Cost of goods available for sale $450,000480,000$

Ending inventory $60,00055,000$

Cost of goods sold $$390,000$ $$425,000$

The following two errors were made in the physical inventory counts:

$1.$ Year $1$ ending inventory was understated by $$8,000$

$2.$ Year $2$ ending inventory was overstated by $$4,000$

Compute the correct cost of goods sold for both years.

Year $1$ Year $2$

Cost of goods sold Answer