Lucia Company reported cost of goods sold for Year 1 and Yea

Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows Beginning inventory Cost of goods purchased Cost of goods available for sale Ending inventory Cost of goods sold 126,000 $131,200 251,200 281,000 377,200 412,200 131,200 136,200 246,000 $276,000 Lucle Company made two errons:10 ending Inventory at the end of Year 1 was understated by $16,200 and 2) ending Inventory the end of Year 2 was overstated by $7200. Given this information, the correct cost of goods sold figure for Year 2 would be Multiple Choice 8 commandoption

Solution

Answer to Question 1:

Correct Cost of Goods Sold = Incorrect Cost of Goods Sold + Understated Beginning Inventory + Overstated Ending Inventory
Correct Cost of Goods Sold = $276,000 + $16,200 + $7,200
Correct Cost of Goods Sold = $299,400

Answer to Question 2:

Units sold on May 10 includes 155 units from beginning inventory and units sold on May 24 includes 25 units from beginning inventory and 80 units from May 5 purchase.

Ending Inventory includes 155 units from May 5 purchase and 115 units of May 15 purchase.

Cost of Ending Inventory = 155 * $15 + 115 * $16
Cost of Ending Inventory = $4,165

Answer to Question 3:

Net Sales = Sales - Sales Returns
Net Sales = $56,400 - $840
Net Sales = $55,560

Cost of Goods Sold = 74% * Net Sales
Cost of Goods Sold = 74% * $55,560
Cost of Goods Sold = $41,114.40

Cost of Goods Sold = Beginning Inventory + Purchases - Ending Inventory
$41,114.40 = $29,400 + $18,400 - Ending Inventory
Ending Inventory = $6,685.60