IAS 8

So, reduce the Cost of Goods Sold in 2007 from $55,800 down to $51,600 and increase the Cost of Goods Sold in 2008 from $34,750 up to $38,950 Rewrite the statements of profit or loss and then increase 2006 taxation charge by $1,260 and decrease 2007 taxation charge by the same amount In future Yvon, when you're faced with a question like this, it would be preferable for you to try to work through it with the answer open in front of you and then say something like "I don't understand where the increase in the 2006 Cost of Goods Sold comes from" If there's one thing that I really do not like it's when a student simply puts a question in front of me with the instruction "Show the statement of profit or loss for 20X7, with the 20X6 comparative, and retained earnings" That, to me, indicates that you have put zero effort into working this problem out for yourself - if fact, this could well be a homework assignment given to you from college but you'd rather that I did it than you :-((( Please bear this in mind in future

Sorry if I have translation misunderstanding " The cost of goods sold for 20X7 includes the $4.2m error in opening inventory" is meaning the the closing inventory in 20X7 is added to 4.2 m? And in calculating retained earnings in 20X7 , the answer is Opening retained earnings 21,950 Correction of prior period (2,940) (4,200-1,260) I don't understnad the correction of prior period Thank you

Hi, Yes, it is saying that the error made has not been adjusted for and so we need to adjust the retained earnings to correct it. Thanks.