Chan Pharmacy reported cost of goods sold as follows: Chan made two errors:
1. 2015 ending inventory was overstated by $3,000.
2. 2016 ending inventory was understated by $9,000.
Instructions
Assuming the errors had not been corrected; indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U).

Question

Chan Pharmacy reported cost of goods sold as follows:  Chan made two errors:
1. 2015 ending inventory was overstated by $3,000.
2. 2016 ending inventory was understated by $9,000.
Instructions
Assuming the errors had not been corrected; indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U).

Quizplus · Accepted Answer

The Answer of Chan Pharmacy reported cost of goods sold as follows:  Chan made two errors:
1. 2015 ending inventory was overstated by $3,000.
2. 2016 ending inventory was understated by $9,000.
Instructions
Assuming the errors had not been corrected; indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U).

Chan Pharmacy Reported Cost of Goods Sold as Follows