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Category > Accounting Posted 24 Jul 2017 My Price 6.00

Pellegrino Watch Company

Pellegrino Watch Company reported the following income statement data for a 2-year period.

Pellegrino uses a periodic inventory system. The inventories at January 1, 2011, and December 31, 2012, are correct. However, the ending inventory at December 31, 2011, was overstated $5,000.
Instructions
(a) Prepare correct income statement data for the 2 years.
(b) What is the cumulative effect of the inventory error on total gross profit for the 2 years?
(c) Explain in a letter to the president of Pellegrino Company what has happened—i.e., the nature of the error and its effect on the financialstatements.

Answers

Maurice Tutor
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Status NEW Posted 24 Jul 2017 10:07 PM My Price 6.00

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