Kingbird Jewelry reported the following income statement data for a 2-year period. 2019 2020 Sales revenue...

Transcribed Image Text:

Kingbird Jewelry reported the following income statement data for a 2-year period. 2019 2020 Sales revenue HK$2,120,000 HK$2,600,000 Cost of goods sold Beginning inventory 325,000 449,000 Cost of goods purchased 1,870,000 2,088,000 Cost of goods available for sale 2,195,000 2,537,000 Ending inventory 449,000 534,000 Cost of goods sold 1,746,000 2,003,000 Gross profit HK$374,000 HK$597,000 Kingbird uses a periodic inventory system. The inventories at January 1, 2019, and December 31, 2020, are correct. However, the ending inventory at December 31, 2019, was understated HK$61,000. (b) What is the cumulative effect of the inventory error on total gross profit for the 2 years? The cumulative effect on total gross profit for the two years is HK$ 5000000 Kingbird Jewelry reported the following income statement data for a 2-year period. 2019 2020 Sales revenue HK$2,120,000 HK$2,600,000 Cost of goods sold Beginning inventory 325,000 449,000 Cost of goods purchased 1,870,000 2,088,000 Cost of goods available for sale 2,195,000 2,537,000 Ending inventory 449,000 534,000 Cost of goods sold 1,746,000 2,003,000 Gross profit HK$374,000 HK$597,000 Kingbird uses a periodic inventory system. The inventories at January 1, 2019, and December 31, 2020, are correct. However, the ending inventory at December 31, 2019, was understated HK$61,000. (b) What is the cumulative effect of the inventory error on total gross profit for the 2 years? The cumulative effect on total gross profit for the two years is HK$ 5000000

Answer rating: 100% (QA)

Answer A 2019 2020 Sales 2120000 2600000 Cost ofgoods sold Beginning inventory A 325000 510000 cost ... View the full answer