Response to the following questions:
1. In taking a physical inventory at the end of year 2011, Nadir Company forgot to count certain units. Explain how this error affects the following:
(a) 2011 cost of goods sold, (b) 2011 gross profit, (c) 2011 net income, (d) 2012 net income, (e) the combined two-year income, and (f) income for years after 2012.
2. Market Company begins the year with $200,000 of goods in inventory. At year-end, the amount in inventory has increased to $230,000. Cost of goods sold for the year is $1,600,000. Compute Market's inventory turnover and days' sales in inventory. Assume that there are 365 days in the year.