Bienvenu Enterprises reported cost of goods sold for 2017 of $1,400,000 and retained earnings of $5,200,000 at December 31, 2017. Bienvenu later discovered that its ending inventories at December 31, 2016 and 2017, were overstated by $110,000 and $35,000, respectively. Determine the corrected amounts for 2017 cost of goods sold and December 31, 2017, retained earnings

Corrected cost of goods sold$1,325,000

Corrected 12/31/17 retained earnings $5,165,000

Explanation:

Cost of goods sold as reported $1,400,000

Overstatement of 12/31/16 inventory (110,000)

Overstatement of 12/31/17 inventory35,000 Corrected cost of goods sold$1,325,000

Retained earnings as reported$5,200,000

Overstatement of 12/31/17 inventory (35,000)

Corrected 12/31/17 retained earnings $5,165,000