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Concord Enterprises Ltd. reported cost of goods sold for 2017 of $2.3 million and retained earnings...

Concord Enterprises Ltd. reported cost of goods sold for 2017 of $2.3 million and retained earnings of $4.2 million at December 31, 2017. Concord later discovered that its ending inventories at December 31, 2016 and 2017 were overstated by $150,000 and $49,000, respectively.

Determine the correct amounts for 2017 cost of goods sold and December 31, 2017 retained earnings.

Corrected cost of goods sold $
Corrected 12/31/17 retained earnings $
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Answer #1

Cost of goods sold reported for 2017 = $2.3 million

Retained earnings reported for 2017 = $4.2 million

Overstated ending inventory at December 31, 2016 = $150,000

Overstated ending inventory at December 31, 2017 = $49,000

Corrected cost of goods sold = Cost of goods sold reported for 2017 - Overstated ending inventory at December 31, 2016 + Overstated ending inventory at December 31, 2017

= 2,300,000 - 150,000 + 49,000

= $2,199,000

Corrected 12/31/17 retained earnings = Retained earnings reported for 2017 - Overstated ending inventory at December 31, 2017

= 4,200,000 - 49,000

= $4,151,000

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