Question

* Data Table Sales revenue $ 245,700 142,800 Cost of goods sold Gross profit $ 102,900 Print Done Done]

Answer 1

Cost of Goods Sold for the year ended May 31, 2018 should be Gross Profit for the year ended May 31, 2018 should be $ 145,400 $ 100,300 Cost of Goods Sold for the year ended May 31, 2018 should be Cost of Goods Sold (Given) $ Add : Overstatement of Ending Inventory | $ Correct Cost of Goods sold $ 142,800 2,600 145,400 Gross Profit for the year ended May 31, 2018 should be Gross Profit (Given) Less : Overstatement of Ending Inventory Correct Gross Profit $ | $ $ 102,900 (2,600) 100,300

Note: Cost of Goods sold = Beginning inventory + Purchases - Ending Inventory If ending inventory overtstaed means. Cost of goods sold is under stated. Hence overstated amount should be added to Cost of goods sold given to arrive the correct cost of goods sold. Gross Profit = Sales - Cost of goods Sold if Cost of Goods sold under stated means Gross profit is over stated. Hence Over stated amount ot be deducted from the given Gross profit, to arrive correct Gross Profit.