Question

4. Baker's Accounting Emporium, a manufacturer of amazing accounting components, provided the following information from its accounting records for the year ended December 31, 2018. Inventory at December 31, 2018 (Physical count at cost) $2,590,000 Accounts payable at December 31, 2018 Net sales (sales less sales returns) 1,900,000 16,680,000 Additional information is as follows. a) Goods received from a vendor on December 29, 2018, were included in the physical count. However, the related $21,500 vendor invoice was not included in accounts payable at December 31, 2018, because the accounts payable copy of the receiving report was lost b) Included in the physical count were components billed to a customer f.o.b. shipping point on December 30, 2018. These components had a cost of $26,000 and were billed at $34,000. The shipment was on Miami Fire's loading dock waiting to be picked up by the common carrier. c) Goods, with an inyoice cost of $27,000, received from a vendor at 6:00 p.m. on December 31, 2018, were recorded on a receiving report dated January 2, 2018. The goods were not included in the physical count, but the invoice was included in accounts payable at December 31, 2018 d) Work in process inventory costing $43,000 was sent to an outside processor for plating on December 28, 2018. e) Components returned by customers and held pending inspection in the returned goods area on December 31, 2018, were not included in the physical count. On January 5, 2018, the components costing $21,000 were inspected and returned to inventory. Credit memos totaling $36,000 were issued to the customers on the same date. f) Goods were in transit from a vendor to Miami Fire on December 31, 2018. The invoice cost was $45,200, and the goods were shipped f.o.b. shipping point on December 26, 2018. g) Components shipped to a customer f.o.b. destination on December 29, 2018, were in transit at December 31, 2018, and had a cost of $15,600. Upon notification of receipt by the customer on January 3, 2018, Miami Fire issued a sales invoice for $23,000. h) On January 3, 2018, a monthly freight bill in the amount of $15,000 was received. The bill specifically related to merchandise purchased in December 2018, one-third of which was still in the inventory at December 31, 2018. The freight charges were not included in either the inventory or in accounts payable at December 31, 2018 Prepare a schedule in good form to determine the actual amounts that should be shown in the December 31, 2018 Inventory

Answer 1

Stefement showing Adual. Ampuit That should be shown in the December 31, 2018 Inventory Inventory of December 31, (2018) $ 959000 Las Tools Casting & alto. Alwall Decoreleed o Gools solel but not dispatch should be Deelentell from buysical count ad cost $ 26,000) ( Goools beceived on 31 Dec, 2018 but kelordless on Jan, 2, 2018 Should also reconeled/ Considered on 31 Dec, 2018 & 97000 D) your leimapreens Inventore sent to outsiele I hocessor is also considered, Assuming that fluished gooels are not sool $ 43000 (E) Components betenned by Customer on 31 dec, 2018 also consifend. I 21,000 I I o Gools in Asansit from a vendor As on 31 Dec 2018 should not recorded in lepsied Inventore. If Con Show A sebarted Item Goool in Trane it! in the current Assef - (A) Component shipped to Customee on approved Baris Should also shown under the heel Goods in Transit instead of

treight specife belly felated to December dois. Proportionally added in Stock unsul ie d of $15.000 de Cost of Inventory As on Dec 31, 2018 $ 5000 $26.50,000 - to p or los si Gools in Transit A (6) $45200 Gol & 156oo. do & do bom $ 60800 w)