Question

Pharoah Company reported these income statement data for a 2-year period.

		2022		2021
Sales revenue		$261,700		$202,620
Beginning inventory		40,400		30,090
Cost of goods purchased		191,760		177,910
Cost of goods available for sale		232,160		208,000
Less: Ending inventory		50,730		40,400
Cost of goods sold		181,430		167,600
Gross profit		$80,270		$35,020

Pharoah Company uses a periodic inventory system. The inventories at January 1, 2021, and December 31, 2022, are correct. However, the ending inventory at December 31, 2021, is overstated by $7,850.

(a)

Prepare correct income statement data for the 2 years.

			2021		2022
Sales			$enter a dollar amount enter a dollar amount		$enter a dollar amount enter a dollar amount
Cost of goods sold
Beginning inventory			enter a dollar amountenter a dollar amount		enter a dollar amountenter a dollar amount
Cost of goods purchased			enter a dollar amountenter a dollar amount		enter a dollar amountenter a dollar amount
Cost of goods available for sale			enter a dollar amountenter a dollar amount		enter a dollar amountenter a dollar amount
Less:	Ending inventory		enter a dollar amountenter a dollar amount		enter a dollar amountenter a dollar amount
	Cost of goods sold		enter a dollar amountenter a dollar amount		enter a dollar amountenter a dollar amount
Gross profit			$enter a dollar amount enter a dollar amount		$enter a dollar amount enter a dollar amount

Answer 1