Answer:
2013: $490,000 2012: $561,000
Question:
Errors in inventory count the following information was taken from the record of Spencer Enterprises
2013 2012
Beginning Inventory $63,000 $83,000
Cost of goods purchased $548,000 $508,000
Cost of goods available for sale $611,000 $591,000
Ending inventory $93,000 $63,000
Cost of goods sold $518,000 $528,000
The following two errors were made in the physical inventory counts:
1. 2012 ending inventory was overstated by $33,000
2. 2013 ending inventory was understated by $28,000.
Compute the correct cost of goods sold for both 2012 and 2013.
Explanation:
Computation of cost of goods sold for the year 2016 and 2015
Particulars 2013 2012
Beginning inventory $63,000 $83,000
Cost of goods purchased $548,000 $508,000
Cost of goods available for sale $611,000 $591,000
Ending inventory (corrected) $121,000 $30,000
Cost of goods sold (corrected) $490,000 $561,000.
note:
In 2013 new ending inventory = $93,000 + $28,000 = $121,000
In 2012 new ending inventory = $63,000 - $33,000 = $30,000
Beginning inventory + Cost of goods purchased = Cost of goods available for sale
Cost of goods available for sale - Ending inventory = Cost of goods sold
