The above pic is Exhibit 6.11 for requirement 2. Please help me by answering all

Question

The above pic is Exhibit 6.11 for requirement 2.
Please help me by answering all requirements.
Thanks alot.

Vibrant Company had $850,000 of sales in each of three consecutive years 2014-2016, and it purchased merchandise costing $500,000 in each of those years. It also maintained a $250,000 physical inventory frum the begianing to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2014 that caused its year-end 2014 inventory to appear on its statements as $230,000 rather han the correct $250,000 1. Determine the correct amount of the company's gross profit in each of the years 2014-2016. 2· Prepare comparative income statements as in Exhibit 6, I l to show the effect of this error on the com puny's cost of goods sold and gross profit for each of the years 2014-2016.

Explanation / Answer

WITH MISTAKE

..

..

CORRECT:-

Part-1:-

..

..

Part-2:-

Comparative Income Statement

Particulars 2014 2015 2016 Sales 850,000 850,000 850,000 Add:-Closing Stock 230,000 250,000 250,000 Less:-Purchases 500,000 500,000 500,000 Less:-Opening Stock 250,000 230,000 250,000 Gross Profit 330,000 370,000 350,000 COGS (Sales- Gross Profit) 520,000 480,000 500,000

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