Question

AFW Inc. reported these figures for its fiscal year (amounts in millions): Net sales..........................$ 2,100 Cost of goods sold..................... Ending inventory ................. 1,140 Suppose AFW later learns that ending inventory was overstated by 58 milion. What are the correct amounts for (a) net sales, (b) ending inventory le cost of goods and propre (a) Net sales would be s million (b) Ending inventory would be 5 million (c) Cost of goods sold would be $ million (d) Gross profit would be s million

Answer 1

Answert & we know that, cast of Goods sold – beg'aning marlovy perchase - Ending inentory. Thus, when ending inventory is owerstated it wrongly voduces the amount de coGes resulting in overstated do gross profit. Though overstatement of inventory have no diret imact on net sale. : @ wet sales Net sales = '$ 9, 100 million Line inventory 6 Ending inventory Ending much Ending inventory - $330-$8 I _ 4322 million i. Ending inventory would be $320 million -JIT © cast of goods sold cast d goods sold = $1,140+#8 - $ 1,148 million

nicost d goods sold would be $1,148 million) Grass grafiti Gross profit +9,100 $1,148 - - $952 million o's Gross profit would be $950 million