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Vibrant Company had $1,050,000 of sales in each of three consecutive years 2012 2014, and it purchased merchandise costing $575,000 in each of those years. It also maintained a $350,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2012 that caused its year-end 2012 inventory to appear on its statements as $330,000 rather than the correct $350,000. |
3.value:
10.00 points
| 1. |
Determine the correct amount of the company’s gross profit in each of the years 2012 2014 |
4.value:
10.00 points
| 2. |
Prepare comparative income statements to show the effect of this error on the company’s cost of goods sold and gross profit for each of the years 2012 2014. |