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24 June, 17:47

Flint Suppliers reported cost of goods sold for 2017 of $880,000 and retained earnings of $1,230,000 at December 31, 2017. Flint later discovered that its ending inventories at December 31, 2016 and 2017, were overstated by $34,500 and $71,000, respectively. Determine the corrected amounts for 2017 cost of goods sold and December 31, 2017, retained earnings.

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  1. 24 June, 18:15
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    corrected amounts cost of goods sold = $916500

    corrected amounts Retained Earnings = $1159000

    Explanation:

    given data

    cost of goods sold = $880,000

    retained earnings = $1,230,000

    ending inventories 2016 = $34,500

    ending inventories 2017 = $71,000

    to find out

    corrected amounts cost of goods sold and retained earnings

    solution

    we get here first corrected amounts for 2017 cost of goods sold will be here as

    corrected amounts cost of goods sold = cost of goods sold - ending inventories 2016 + ending inventories 2017 ... 1

    corrected amounts cost of goods sold = $880,000 - $34,500 + $71,000

    corrected amounts cost of goods sold = $916500

    and now we get corrected amounts Retained Earnings that will be as

    corrected amounts Retained Earnings = retained earnings - ending inventories 2017

    corrected amounts Retained Earnings = $1,230,000 - $71,000

    corrected amounts Retained Earnings = $1159000
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