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HAI JOHN SIR
how to solve this question
The draft account of anthea co.for the year ended 31 december 20X9 includes
Revenue=80000
Gross profit=20000It was subsequently discovered that revenue had een understated by 10000 and closing inventory overstated by 5000
what is the correct gross profit percentage?
can you please say the reason also
regards
AHLAM AMINA
Correcting the understatement of the revenue means that the correct revenue will be higher at $90,000 and the correct profit will be higher at $30,000.
Correcting the overstatement of the closing inventory will not affect the revenue which will therefore remain at $90,000, but will mean that the cost of sales will be higher and therefore the profit will be lower by $5,000 and will therefore be $25,000.
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