Please do not give solution in image format ?. E7-1 (Algo) Analyzing Items to Be Included in Inventory LO7-1Based on its physical count of inventory in its warehouse at year-end, December 31 of the current year, Plummer Company planned toreport inventory of $34,600. During the audit, the independent CPA developed the following additional information:a. Goods from a supplier costing $640 are in transit with UPS on December 31 of the current year. The terms are FOB shippingpoint (explained in the "Required" section). Because these goods had not yet arrived, they were excluded from the physicalinventory count.b. Plummer delivered samples costing $1,750 to a customer on December 27 of the current year, with the understanding that theywould be returned to Plummer on January 15 of the next year. Because these goods were not on hand, they were excluded fromthe inventory count.c. On December 31 of the current year, goods in transit to customers, with terms FOB shipping point, amounted to $6,000(expected delivery date January 10 of the next year). Because the goods had been shipped, they were excluded from thephysical inventory count.d. On December 31 of the current year, goods in transit to customers, with terms FOB destination, amounted to $3,000 (expecteddelivery date January 10 of the next year). Because the goods had been shipped, they were excluded from the physical inventorycount.Required:Plummer's accounting policy requires including in inventory all goods for which it has title. Note that the point where title (ownership)changes hands is determined by the shipping terms in the sales contract. When goods are shipped "FOB shipping point," title changeshands at shipment and the buyer normally pays for shipping. When they are shipped "FOB destination," title changes hands ondelivery, and the seller normally pays for shipping. Compute the correct amount for the ending inventory.Note: If no adjustment is necessary, enter a $0 in the cell.ItemEnding inventory (physical count on December 31 of the current year)a. Goods purchased and in transitb. Samples out on trial to customerc. Goods in transit to customerd. Goods in transit to customerCorrect inventory, December 31, current year$Amount34,60034,600

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Based on its physical count of inventory in its warehouse at year-end. December 31 of the current year, Plummer Company planned to report inventory of $34,600. During the audit, the independent CPA developed the following additional information: a. Goods from a supplier costing $640 are in transit with UPS on December 31 of the current year. The terms are FOB shipping point (explained in the "Required" section). Because these goods had not yet arrived, they were excluded from the physical inventory count. b. Plummer delivered samples costing $1,750 to a customer on December 27 of the current year, with the understanding that they would be returned to Plummer on January 15 of the next year. Because these goods were not on hand, they were excluded from the inventory count

Based on its physical count of inventory in its warehouse at year-end. December 31 of the current year, Plummer Company planned to report inventory of $34,600. During the audit, the independent CPA developed the following additional information: a. Goods from a supplier costing $640 are in transit with UPS on December 31 of the current year. The terms are FOB shipping point (explained in the "Required" section). Because these goods had not yet arrived, they were excluded from the physical inventory count. b. Plummer delivered samples costing $1,750 to a customer on December 27 of the current year, with the understanding that they would be returned to Plummer on January 15 of the next year. Because these goods were not on hand, they were excluded from the inventory count

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 5MC: The moving average inventory cost flow assumption is applicable to which of the following inventory...

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Errors As controller of Lerner Company, which uses a periodic inventory system, you discover the following errors in the current year: 1. Merchandise with a cost of 17,500 was properly included in the final inventory, but the purchase was not recorded until the following year. 2. Merchandise purchases are in transit under terms of FOB shipping point. They have been excluded from the inventory, but the purchase was recorded in the current year on the receipt of the invoice of 4,300. 3. Goods out on consignment have been excluded from inventory. 4. Merchandise purchases under terms FOB shipping point have been omitted from the purchases account and the ending inventory. The purchases were recorded in the following year. 5. Goods held on consignment from Talbert Supply Co. were included in the inventory. Required: For each error, indicate the effect on the ending inventory and the net income for the current year and on the net income for the following year.
The moving average inventory cost flow assumption is applicable to which of the following inventory systems? Questions M7-6 and M7-7 are based on the following data: City Stationers Inc. had 200 calculators on hand on January 1, 2019, costing 18 each. Purchases and sales of calculators during the month of January were as follows: City uses a periodic inventory system. According to a physical count, 150 calculators were on hand at January 31, 2019.
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Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2, were as follows: There are 1,200 units of inventory on hand on December 31, 20-2. REQUIRED 1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods: (a) FIFO (b) LIFO (c) Weighted-average (round calculations to two decimal places) 2. Assume that the market price per unit (cost to replace) of Hursts inventory on December 31 was 18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods: (a) FIFO lower-of-cost-or-market (b) Weighted-average lower-of-cost-or-market 3. In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of 100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.
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1. Your audit of DEC Company's inventory and related records revealed the following information: Merchandise inventory, January 1, 2019 450,000 Purchases for the year 2019 3,150,000 Sales for the year 2019 4,200,000 You conducted a physical inventory on December 31, 2019 and deterrnined 500,000 was in the company's warehouse. The company's president suspects some new employees may have pilfered a portion of the merchandise inventory. REQUIRED: Determine the estimated cost of the missing inventory, assuming DEC Company 's gross profit remained constant at: - 40% of sales - 40% of cost of sales 2. You took a physical inventory for your sole proprietorship at the close of business on July 31, 2019. The inventory totaled 205,000. You were verifying the accuracy of the inventory records at June 30, 2019, therefore you must estimate an inventory amount on that date. You find that during the period July 1 through July 31, 2019, sales were 705,000; sales returns, 18,000; gross purchases…
19.Your review of ABC Company's inventory and related records for the year revealed the following information:Inventory, 1/1 - 450,000Purchases -3,150,000Sales -4,200,000You conducted a physical inventory on December 31 and determined P450,000 was in the company's warehouse. The management suspects some new employees may have pilfered a portion of the merchandise inventory.What is the cost of the missing inventory assuming that ABC's gross profit remains at 30% of sales?
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Based on its physical count of inventory in its warehouse at year-end, December 31, 2014, Madison Company planned to report inventory of $35,300. During the audit, the independent CPA developed the following additional information: a. Goods from a supplier costing $700 are in transit with UPS on December 31, 2014. The terms are FOB shipping point (explained in the “Required” section). Because these goods had not yet arrived, they were excluded from the physical inventory count. b. Madison delivered samples costing $1,740 to a customer on December 27, 2014, with the understanding that they would be returned to Madison on January 15, 2015. Because these goods were not on hand, they were excluded from the inventory count. c. On December 31, 2014, goods in transit to customers, with terms FOB shipping point, amounted to $6,000 (expected delivery date January 10, 2015). Because the goods had been shipped, they were excluded from the physical inventory count. d. On…
Required information [The following information applies to the questions displayed below.] Autumn Company began the month of October with inventory of $31,000. The following inventory transactions occurred during the month: a. The company purchased inventory on account for $46,000 on October 12. Terms of the purchase were 2/10. "/30. Autumn uses the net method to record purchases. The inventory was shipped f.o.b. shipping point and freight charges of $660 were paid in cash. b. On October 31, Autumn paid for the inventory purchased on October 12. c. During October inventory costing $20,400 was sold on account for $31,200. d. It was determined that inventory on hand at the end of October cost $56,340. Required: 1. Assuming Autumn Company uses a perpetual inventory system, prepare journal entries for the above transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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