Nash Jewelry reported the following income statement data for a 2-year period. ...
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Accounting
Nash Jewelry reported the following income statement data for a 2-year period.
2019
2020
Sales revenue
HK$2,130,000
HK$2,540,000
Cost of goods sold
Beginning inventory
344,000
441,000
Cost of goods purchased
1,730,000
2,161,000
Cost of goods available for sale
2,074,000
2,602,000
Ending inventory
441,000
538,000
Cost of goods sold
1,633,000
2,064,000
Gross profit
HK$497,000
HK$476,000
Nash 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$70,000.
A/ Prepare correct income statement data for the 2 years.
B/ What is the cumulative effect of the inventory error on total gross profit for the 2 years?
Nash Jewelry reported the following income statement data for a 2-year period.
| 2019 | 2020 |
Sales revenue | HK$2,130,000 | HK$2,540,000 |
Cost of goods sold |
|
|
Beginning inventory | 344,000 | 441,000 |
Cost of goods purchased | 1,730,000 | 2,161,000 |
Cost of goods available for sale | 2,074,000 | 2,602,000 |
Ending inventory | 441,000 | 538,000 |
Cost of goods sold | 1,633,000 | 2,064,000 |
Gross profit | HK$497,000 | HK$476,000 |
Nash 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$70,000.
A/ Prepare correct income statement data for the 2 years.
B/ What is the cumulative effect of the inventory error on total gross profit for the 2 years?
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