Question

Bakery reported net sales revenue of $ 60 comma 000and cost of goods sold of $ 23 comma 000.Compute Hudson River'scorrect gross profit if the company made either of the following independent accounting errors.a.  Ending merchandise inventory is overstated by $ 6 comma 000.b.  Ending merchandise inventory is understated by $ 6 comma 000.

Answer 1

a. $43,000

b. $31,000

Step-by-step explanation:

Computation table:

Particular's Reported (a)Overstated (b)Understated

Sale's revenue $60,000 $60,000 $60,000

Less: Cost of goods sold $23,000 $23,000 $23,000

Add/Less: Adjustment $6,000 ($6,000)

Gross profit $37,000 $43,000 $31,000