Problem - Van Dyke Pool Supplies' merchandise inventory data for the year ended December 31, 2015, follow:
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Sales Revenue
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$59,000
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Cost of Goods Sold:
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Beginning Merchandise inventory
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$4,100
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Net Cost of Purchases
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32,200
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Cost of Goods Available for Sale
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36,300
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Less: Ending Merchandise Inventory
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3,600
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Cost of Goods Sold
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$32,700
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Gross Profit
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$26,300
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1. Assume that the ending merchandise inventory was accidentally overstated by $2200. What are the correct amounts for cost of goods sold and gross profit?
2. How would the inventory error affect Van Dyke Pool Supplies' cost of goods sold and gross profit for the year ended December 31, 2016, if the error is not corrected in 2015?