Question

Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year ended December 31, the company reported Inventory of $75,000 and Cost of Goods Sold of $430,000. a. Included in Inventory (and Accounts Payable) are $11,000 of lenses held on consignment. b. Included in the Inventory balance are $5,500 of office supplies held in SLC's warehouse c. Excluded from the Inventory balance are $8,500 of lenses in the warehouse, ready to send to customers on January 1. SLC reported these lenses as sold on December 31, at a price of $16,000 d. Included in the Inventory balance are $3,250 of lenses that were damaged in December and will be scrapped inJanury with no recoverable value. Required: Prepare the table showing the balances presently reported for Inventory and Cost of Goods Sold, and then displaying the adjustment(s) needed to correctly account for each of items (a)-(d), and finally determining the appropriate Inventory and Cost of Goods Sold balances. (Enter any decreases to account balances with a minus sign.) InventoryCost of Goods Sold Present Balance d. Appropriate Balance

Answer 1

				inventory	COGS
	Present balance			75,000	430,000
	a.			-11,000	0
	b.			-5,500	0
	c.			8,500	-16,000
	d.			-3,250	3,250
	Appropirate balance			63,750	417,250
	office supplies are not inventory hence excluded