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Question - Vibrant Company had 3850.000 of sales in each of three consecutive years 2016-2013. and it purchased merchandise costing $500,000 in each of those years. It also maintained a $250,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory. it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $230,000 rather than the correct $250,000.
Required -
1. Determine the correct amount of the company's gross pro?t in each of the years 2016-2018.
2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016-2018.
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