How to calculate error for squared data?

Determine the effects of inventory error . Calculate inventory turnover.?

• The records of pelletier company shpw the following data: 2006; 2007; 2008; Sales 300,000 312,000 324,000 Beginning Inventory 25,000 17,000 29,000 Cost Of Goods Purchased 250,000 285,000 245,000 Ending Inventory 17,000 29,000 35,000 Operating Expenses 50,000 52,000 54,000 After July 31,2008, year end,pelleitier two errors: (1) Ending inventory in 2006 was understated by $10,000 (2) The cost of goods purchased for the year ended july 31,2007 included $25,000 of merchandise that should have been recorded as a purchase in the year ended july 31st,2008. The july 31,2007 inventory was correctly calculated. Instructions (A)Prepare incorrect and corrected income statement for the year ended july 31,2007 and 2008 (B)What is the combined effect of the error on owners equity at july 31,2008 before correction? (C) Calculate the correct and incorrect inventory turn over ratios for each of the years 2006,2007 and 2008 You need to explain the effects of the error, with a solid paragraph answer. For part c you need to show inventory turnover figures for each year for both the incorrect and correct income statements Remember to show your calculations.

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