Correcting an inventory error---two years Great Foods Grocery reported the follo
ID: 2426070 • Letter: C
Question
Correcting an inventory error---two years
Great Foods Grocery reported the following comparative income statements for the years ended June 30, 2015:
Great Food Grocery
Income statements
Years ended June 30, 2016 and 2015
Sales revenue
$13,900
$120,000
Cost of goods sold:
Beginning merchandise inventory
$13,000
$12,000
Net cost of purchase
76,00
70,00
Cost of goods available for sale
89,000
82,000
Less: ending merchandise inventory
17,000
13,000
Cost of goods sold
72,000
69,000
Gross profit
67,000
51,000
Operating expenses
23,000
18,000
Net income
$44,000
$33,000
Great Food Grocery
Income statements
Years ended June 30, 2016 and 2015
Sales revenue
$13,900
$120,000
Cost of goods sold:
Beginning merchandise inventory
$13,000
$12,000
Net cost of purchase
76,00
70,00
Cost of goods available for sale
89,000
82,000
Less: ending merchandise inventory
17,000
13,000
Cost of goods sold
72,000
69,000
Gross profit
67,000
51,000
Operating expenses
23,000
18,000
Net income
$44,000
$33,000
Explanation / Answer
The one marked in bold has been corrected to arrive at COGS
Sales revenue 139000 120000 Cost of goods sold: Beginning merchandise inventory $13,000 $12,000 Net cost of purchase 76000 70000 Cost of goods available for sale 89,000 82,000 Less: ending merchandise inventory 17,000 13,000 Cost of goods sold $72,000 $69,000 Gross Profit $67,000 $51,000