O'Neil's Hardware Store, in St

question 26

Essay

O'Neil's Hardware Store, in St. John's, NL, prepared the following analysis of cost of goods sold for the previous three years: Profit for the years 2013, 2014, and 2015 was $83,000, $32,000, and $67,000, respectively. Since income had declined so much from 2013 to 2015, Mr. O'Neil hired a new accountant to investigate the cause(s) for the declines.
The accountant determined the following:
1. Purchases of $42,000 that occurred in 2013 were not recorded until 2014.
2. The December 31 2013 inventory should have been $23,000.
3. The 2014 ending inventory included inventory costing $6,000 that was purchased FOB destination point and was in transit at year end.
4. The 2015 ending inventory did not include goods costing $3,000 that were shipped on December 29 to Rosewell Plumbing Company, FOB shipping point. The goods were still in transit at the end of the year.
Instructions
Determine the correct income for each year. (Show all calculations.)

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Definitions:

Groundwater Flow

The movement of water underground through the spaces in soil, sand, and rocks, which plays a critical role in the hydrologic cycle and water supply.

Water Table

The upper level of an underground surface where the soil or rocks are permanently saturated with water, marking the boundary between the water-saturated ground and unsaturated ground above.

Precipitation

Any variety of water, in liquid or solid form, that comes down from the atmosphere and touches the earth, including various forms like rain, snow, sleet, and hail.

Runoff

This refers to the water from rain, snow, or other sources that flows over the land's surface and is not absorbed, eventually making its way into rivers, lakes, and oceans.