Waters Hardware reported cost of the goods sold as follows. Waters made two errors: (1) 2017 ending inventory was overstated $5,000, and (2) 2018 ending inventory was understated $8,000
Instructions
(a) Compute the correct cost of goods sold for each year.
(b) What correcting entry would Waters make for error (2)?

Question

Waters Hardware reported cost of the goods sold as follows.  Waters made two errors: (1) 2017 ending inventory was overstated $5,000, and (2) 2018 ending inventory was understated $8,000
Instructions
(a) Compute the correct cost of goods sold for each year.
(b) What correcting entry would Waters make for error (2)?

Quizplus · Accepted Answer

The Answer of Waters Hardware reported cost of the goods sold as follows.  Waters made two errors: (1) 2017 ending inventory was overstated $5,000, and (2) 2018 ending inventory was understated $8,000
Instructions
(a) Compute the correct cost of goods sold for each year.
(b) What correcting entry would Waters make for error (2)?

Waters Hardware Reported Cost of the Goods Sold as Follows