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Based on the accounting books, you are confident about the following information:
Opening Inventory: $400,000 Purchases: $200,000Freight-in: $ 50,000COGS: $500,000
Problem 1: What is the expected Closing inventory?
Problem 2: When physical inventory was taken, a storage bin was overlooked. As a result, the Closing Inventory was understated by $70,000 (i.e. the inventory was $70,000 less than it should have been). Your boss wants to know what impact this has on the following:
1. Cost of goods sold 2. Gross profit 3. Net Income 4. Balance Sheet
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