What is the cumulative effect of the inventory error on total gross profit for the 2 years?
if 2010- total gross profit was 49,000 and 2011 total gross profit was 56,000?
answer did was un resourceful…please help
The cumulative effect of an inventory error on total gross profit for the 2 years would be $0. An error in the closing inventory in one year would mean an error in the beginning inventory in the following year. Each year’s gross profit would be wrong, but the two years’ gross profit taken together would have a 0 effect, i.e., the total GP for the two years, even if there had been no error, would still have been $105,000.
Total Gross Profit
Thank you Sandy!