Accounting 9706 · AS & A Level · Reconciliation and verification

Reconciliation and verification — practice question

A business gives the following data. Year 1: profit for the year $30000$, cost of goods sold $240000$. Year 2: profit for the year $40000$, cost of goods sold $320000$. The owner later finds that, at the close of year 1, inventory had been overstated by $2000$. What are the adjusted profits for the year and cost of goods sold figures?

  • AYear 1 profit $28000$, Year 1 cost of goods sold $238000$; Year 2 profit $42000$, Year 2 cost of goods sold $322000$
  • BYear 1 profit $28000$, Year 1 cost of goods sold $242000$; Year 2 profit $40000$, Year 2 cost of goods sold $320000$
  • CYear 1 profit $28000$, Year 1 cost of goods sold $242000$; Year 2 profit $42000$, Year 2 cost of goods sold $318000$
  • DYear 1 profit $32000$, Year 1 cost of goods sold $238000$; Year 2 profit $38000$, Year 2 cost of goods sold $318000$

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