Using the following information to answer questions 10 and 11
Mason's Hardware Store prepared Ihe following analysis of cost of goods sold for the previous Ihree years:
Net income for the years 2004, 2005, and 2006 was $70,000, $60,000, and $55,000,respectively. Since net income was consistently declining, Mr. Mason hired a new accountant to investigate the cause(s) for the declines.
The accountant determined the following:
【題組】3- The 2005 ending inventory included inventory costing $8,000 that was purchased FOB destination and in transit ai year end