Question

Locher Co. reported cost of goods sold for 2020 of $1,400,000. Locher later discovered that its ending inventories at December 31, 2019 and 2020 were overstated by $110,000 ad $35,000, respectively. What is the correct amount for 2020 cost of goods sold

Answer 1

Answer:

$1,325,000

Explanation:

Calculation for the correct amount for 2020 cost of goods sold

Using this formula

2020 Correct amount for Cost of Goods sold = Reported cost of Goods sold + 2020 Overstated ending inventory - 2019!Overstated Ending inventory

Let plug the formula

2020 Correct amount for Cost of Goods sold = $1,400,000 + $35,000 - $110,000

2020 Correct amount for Cost of Goods sold = $1,325,000

Therefore 2020 Correct amount for Cost of Goods sold will be $1,325,000