Question

E6-8 Glacier Fishing Gear reported the following amounts for its cost of goods sold and ending inventory: Det 2014 Cost of goods sold $170,000 Ending inventory 30,000 2013 $175,000 30,000 Glacier made two errors: (1) 2013 ending inventory was overstated by $5,500, and (2) 2014 ending inven- tory was understated by $4,000. (Hint: Recall that the ending inventory for 2013 becomes the beginning inventory for 2014.) Instructions (a) Calculate the correct cost of goods sold and ending inventory for each year. (b) Describe the impact of the errors on profit for 2013 and 2014 and on owner's equity at the end of 2013 and 2014. (c) Explain why it is important that Glacier Fishing Gear correct these errors as soon as they are discovered. inve (SC

          E6-8 Glacier Fishing Gear reported the following amounts for its cost of goods sold and ending inventory: Det
2014
Cost of goods sold
$170,000
Ending inventory
30,000
2013
$175,000
30,000
Glacier made two errors: (1) 2013 ending inventory was overstated by $5,500, and (2) 2014 ending inven-
tory was understated by $4,000. (Hint: Recall that the ending inventory for 2013 becomes the beginning
inventory for 2014.)
Instructions
(a) Calculate the correct cost of goods sold and ending inventory for each year.
(b) Describe the impact of the errors on profit for 2013 and 2014 and on owner's equity at the end of
2013 and 2014.
(c) Explain why it is important that Glacier Fishing Gear correct these errors as soon as they are
discovered.
inve
(SC

E6-8 Glacier Fishing Gear reported the following amounts for its cost of goods sold and ending inventory: Det
2014
Cost of goods sold
170,000
Ending inventory
30,000
2013175,000
30,000
Glacier made two errors: (1) 2013 ending inventory was overstated by 5,500, and (2) 2014 ending inven-
tory was understated by4,000. (Hint: Recall that the ending inventory for 2013 becomes the beginning
inventory for 2014.)
Instructions
(a) Calculate the correct cost of goods sold and ending inventory for each year.
(b) Describe the impact of the errors on profit for 2013 and 2014 and on owner's equity at the end of
2013 and 2014.
(c) Explain why it is important that Glacier Fishing Gear correct these errors as soon as they are
discovered.
inve
(SC

Added by Lisa T.

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