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Periodic Inventory System

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50. Prunedale Co. uses a periodic inventory system. Beginning inventory on January 1 was overstated by $32,000, and its ending inventory on December 31 was understated by $62,000. These errors were not discovered until the following year. As a result, Prunedale's cost of goods sold for this year was:

A. Overstated by $94,000.
B. Overstated by $30,000.
C. Understated by $94,000.
D. Understated by $30,000.

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Solution Summary

answer showing the calculation.

Solution provided by:
Sonia Agarwal, CA
Education
  • Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
  • Bachelor of Commerce, West Bengal University
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