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Spring Corporation uses a Periodic Inventory System and reports Merchandising Inventory on the Balance Sheet at \$180,000 on December 31, 2016, and \$194,000 on December 31, 2015. While preparing the December 31, 2017 Balance Sheet, Spring realizes that a Purchase Return that occurred on December 30, 2016, is not recorded until January 2, 2017 in error.

As a result, this Purchase Return in the amount of \$2,500 is not included in the Net Purchases amount of \$804,000 that is reported on the 2016 Income Statement. The Inventory amount reported at the end of 2015 is correct.

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