Jacob’s Hardware reported cost of goods sold as follows.
|
2011 |
2012 |
|
|
Beginning inventory |
$ 20,000 |
$ 30,000 |
|
Cost of goods purchased |
150,000 |
175,000 |
|
Cost of goods available for sale |
170,000 |
205,000 |
|
Ending inventory |
30,000 |
35,000 |
|
Cost of goods sold |
$140,000 |
$170,000 |
Jacob’s made two errors: (1) 2011 ending inventory was overstated $3,000, and (2) 2012 ending inventory was understated $6,000.
Instructions
Compute the correct cost of goods sold for each year.