Company Elmira reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 32,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 10, Problem 13PA
Textbook Problem
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Company Elmira reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 32,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?

To determine

(a)

Concept introduction:

Cost of Goods sold is calculated with the help of following formulas:

Cost of goods sold = Beginning Inventory + Purchases − Ending Inventory

Or

Cost of goods sold = Goods Available for sale − Ending Inventory

To calculate:

The restated amount of Cost of Goods Sold for the year 2021

Explanation of Solution

The restated amount of Cost of Goods Sold for the year 2021 is calculated as follows:

 Year 2021 Restated Beginning Inventory (A) \$ 3...
To determine

(b)

Concept introduction:

Cost of Goods sold is calculated with the help of following formulas:

Cost of goods sold = Beginning Inventory + Purchases − Ending Inventory

Or

Cost of goods sold = Goods Available for sale − Ending Inventory

To calculate:

The restated amount of Cost of Goods Sold for the year 2022

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