🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Accounting
2
answers
0
watching
226
views

1-In your audit of Morgan Company, you find that a physical inventory on December 31, 2017, showed merchandise with a cost of $445,530 was on hand at that date. You also discover the following items were all excluded from the $445,530.

1.

Merchandise of $55,190 which is held by Morgan on consignment. The consignor is the Max Suzuki Company.

2.

Merchandise costing $40,830 which was shipped by Morgan f.o.b. destination to a customer on December 31, 2017. The customer was expected to receive the merchandise on January 6, 2018.

3.

Merchandise costing $48,740 which was shipped by Morgan f.o.b. shipping point to a customer on December 29, 2017. The customer was scheduled to receive the merchandise on January 2, 2018.

4.

Merchandise costing $75,050 shipped by a vendor f.o.b. destination on December 30, 2017, and received by Morgan on January 4, 2018.

5.

Merchandise costing $49,450 shipped by a vendor f.o.b. shipping point on December 31, 2017, and received by Morgan on January 5, 2018.


Based on the above information, calculate the amount that should appear on Morgan’s balance sheet at December 31, 2017, for inventory.

Inventory as on December 31, 2017

2- Pina Company has used the dollar-value LIFO method for inventory cost determination for many years. The following data were extracted from Pina’s records.

Price
Index

Ending Inventory
at Base Prices

Ending Inventory
at Dollar-Value LIFO

December 31, 2017

105

$92,490

$85,600

December 31, 2018

?

97,490

91,200


Calculate the index used for 2018 that yielded the above results.

Index used for 2018

Watch
2
answers
0
watching
226
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share
Lelia Lubowitz
Lelia LubowitzLv2
29 Sep 2019
Already have an account? Log in
Share

Related questions

Exercise 8-2

In your audit of Steve Company, you find that a physicalinventory on December 31, 2017, showed merchandise with a cost of$426,690 was on hand at that date. You also discover the followingitems were all excluded from the $426,690.

1. Merchandise of $60,810 which is held by Steve on consignment.The consignor is the Max Suzuki Company.
2. Merchandise costing $38,100 which was shipped by Steve f.o.b.destination to a customer on December 31, 2017. The customer wasexpected to receive the merchandise on January 6, 2018.
3. Merchandise costing $47,790 which was shipped by Steve f.o.b.shipping point to a customer on December 29, 2017. The customer wasscheduled to receive the merchandise on January 2, 2018.
4. Merchandise costing $77,180 shipped by a vendor f.o.b.destination on December 30, 2017, and received by Steve on January4, 2018.
5. Merchandise costing $46,400 shipped by a vendor f.o.b. shippingpoint on December 31, 2017, and received by Steve on January 5,2018.


Based on the above information, calculate the amount that shouldappear on Steve’s balance sheet at December 31, 2017, forinventory.

Inventory as on December 31, 2017

(TCO G) In your audit of Garza Company, you find that a physicalinventory on December 31, 2010, showed merchandise with a cost$441,000 was on hand at that date. You also discover the followingitems were all excluded from the inventory count. •Merchandise of$61,000, which is held by Garza on consignment. The consignee isthe Bontemps Company. •Merchandise costing $33,000, which wasshipped by Garza f.o.b. destination to a customer on December 31,2010. The customer was expected to receive the merchandise onJanuary 6, 2011. •Merchandise costing $46,000, which was shipped byGarza f.o.b. shipping point to a customer on December 29, 2010. Thecustomer was schedule to receive the merchandise on January 2,2011. •Merchandise costing $73,000 shipped by a vendor f.o.b.destination on December 30, 2010, and received by Garza on January4, 2011. •Merchandise costing $51,000 shipped by a vendor f.o.b.shipping point on December 31, 2010, and received by Garza onJanuary 5, 2011. Based on the above information, calculate theamount that should appear on Garza’s balance sheet at December 31,2010, for inventory

Capwell Corporation uses a periodic inventory system. Thecompany's ending inventory on December 31, 2018, its fiscal-yearend, based on a physical count, was determined to be $338,000.Capwell's unadjusted trial balance also showed the followingaccount balances: Purchases, $740,000; Accounts payable; $270,000;Accounts receivable, $285,000; Sales revenue, $920,000.

The internal audit department discovered the following items:

Goods valued at $44,000 held on consignment from Dix Companywere included in the physical count but not recorded as apurchase.

Purchases from Xavier Corporation were incorrectly recorded at$64,000 instead of the correct amount of $46,000. The correctamount was included in the ending inventory.

Goods that cost $37,000 were shipped from a vendor on December28, 2018, terms f.o.b. destination. The merchandise arrived onJanuary 3, 2019. The purchase and related accounts payable wererecorded in 2018.

One inventory item was incorrectly included in ending inventoryas 220 units, instead of the correct amount of 1,600 units. Thisitem cost $50 per unit.

The 2017 balance sheet reported inventory of $472,000. Theinternal auditors discovered that a mathematical error caused thisinventory to be understated by $74,000. This amount is consideredto be material. Comparative financial statements will beissued.

Goods shipped to a customer f.o.b. destination on December 25,2018, were received by the customer on January 4, 2019. The salesprice was $52,000 and the merchandise cost $28,000. The sale andcorresponding accounts receivable were recorded in 2018.

Goods shipped from a vendor f.o.b. shipping point on December27, 2018, were received on January 3, 2019. The merchandise cost$30,000. The purchase was not recorded until 2019.


Required:
1. Determine the correct amounts for 2018 endinginventory, purchases, accounts payable, accounts receivable, andsales revenue.
2. Calculate cost of goods sold for 2018.
3. What was the effect of the error in endinginventory on 2017 before-tax income

Determine the correct amounts for 2018 ending inventory,purchases, accounts payable, accounts receivable, sales revenue,and cost of goods sold.

Ending inventory
Purchases
Accounts payable
Accounts receivable
Sales revenue
Cost of goods sold

What was the effect of the error in ending inventory on 2017before-tax income?

2017 before-tax incomewas by

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in