Amount of inventory 486490 76245

Name: amount of inventory 486490 76245
Uploaded: 2023-10-21T19:56:56-08:00
Duration: 7 min 18 s
Channel: Akash M
Description: amount of inventory 486490 76245

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Blue Company asks you to review its December 31, 2020, inventory values and prepare the necessary adjustments to the books. The following information is given to you. 1. Blue uses the periodic method of recording inventory. A physical count reveals $493,269 of inventory on hand at December 31, 2020. 2. Not included in the physical count of inventory is $28,182 of merchandise purchased on December 15 from Browser. This merchandise was shipped f.o.b. shipping point on December 29 and arrived in January. The invoice arrived and was recorded on December 31. 3. Included in inventory is merchandise sold to Champy on December 30, f.o.b. destination. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale on account for $26,880 on December 31. The merchandise cost $15,435, and Champy received it on January 3. 4. Included in inventory was merchandise received from Dudley on December 31 with an invoice price of $32,823. The merchandise was shipped f.o.b. destination. The invoice, which has not yet arrived, has not been recorded. 5. Not included in inventory is $17,934 of merchandise purchased from Glowser Industries. This merchandise was received on December 31 after the inventory had been counted. The invoice was received and recorded on December 30. 6. Included in inventory was $21,920 of inventory held by Blue on consignment from Jackel Industries. 7. Included in inventory is merchandise sold to Kemp f.o.b. shipping point. This merchandise was shipped on December 31 after it was counted. The invoice was prepared and recorded as a sale for $39,690 on December 31. The cost of this merchandise was $22,092, and Kemp received the merchandise on January 5. 8. Excluded from inventory was a carton labeled "Please accept for credit." This carton contains merchandise costing $3,150 which had been sold to a customer for $5,460. No entry had been made to the books to reflect the return, but none of the returned merchandise seemed damaged; Blue will honor the return. Determine the proper inventory balance for Blue Company at December 31, 2020. Inventory balance as on December 31, 2020 Prepare any correcting entries to adjust inventory to its proper amount at December 31, 2020. Assume the books have not been closed.

Akash M.

The inventories control account balance of St George Fashions at 30 June 2023 was $110 510 using the perpetual method. A physical count conducted on that day found inventories on hand worth $110 100. Net realisable value for each inventories item held for sale exceeded cost. An investigation of the discrepancy revealed the following. • Goods worth $3300 held on consignment for Rockhampton Accessories had been included in the physical count.• Goods costing $600 were purchased on credit from Springbrook Ltd on 27 June 2023 on FOB shipping terms. The goods were shipped on 28 June 2023 but, as they had not arrived by 30 June 2023, were not included in the physical count. The purchase invoice was received and processed on 30 June 2023.• Goods costing $1200 were sold on credit to Noosa Pty Ltd for $1950 on 28 June 2023 on FOB destination terms. The goods were still in transit on 30 June 2023. The sales invoice was raised and processed on 29 June 2023.• Goods costing $1365 were purchased on credit (FOB destination) from Launceston Handbags on 28 June 2023. The goods were received on 29 June 2023 and included in the physical count. The purchase invoice was received on 2 July 2023.• On 30 June 2023, St George Fashions sold goods costing $3150 on credit (FOB shipping) terms to Kurnell’s Boutique for $4800. The goods were dispatched from the warehouse on 30 June 2023 but the sales invoice had not been raised at that date.• Damaged inventories valued at $1325 were discovered during the physical count. These items were still recorded on 30 June 2023 but were omitted from the physical count records pending their write-off. Required 1. Prepare any journal entries necessary on 30 June 2023 to correct any errors and to adjust inventories. 2. i) What does the term ‘net realisable value’ mean?2. ii) What sources of evidence could a company use to determine net realisable value?2. iii)What action should a company take at year end if some of its inventory items have declined in value while other inventory items have increased in value? Why?

Supreeta N.

The inventory control account balance of St George Fashions at 30 June 2023 was $110,510 using the perpetual method. A physical count conducted on that day found inventories on hand worth $110,100. Net realizable value for each inventory item held for sale exceeded cost. An investigation of the discrepancy revealed the following: - Goods worth $3,300 held on consignment for Rockhampton Accessories had been included in the physical count. - Goods costing $600 were purchased on credit from Springbrook Ltd on 27 June 2023 on FOB shipping terms. The goods were shipped on 28 June 2023 but, as they had not arrived by 30 June 2023, were not included in the physical count. The purchase invoice was received and processed on 30 June 2023. - Goods costing $1,200 were sold on credit to Noosa Pty Ltd for $1,950 on 28 June 2023 on FOB destination terms. The goods were still in transit on 30 June 2023. The sales invoice was raised and processed on 29 June 2023. - Goods costing $1,365 were purchased on credit (FOB destination) from Launceston Handbags on 28 June 2023. The goods were received on 29 June 2023 and included in the physical count. The purchase invoice was received on 2 July 2023. - On 30 June 2023, St George Fashions sold goods costing $3,150 on credit (FOB shipping) terms to Kurnell's Boutique for $4,800. The goods were dispatched from the warehouse on 30 June 2023 but the sales invoice had not been raised at that date. - Damaged inventories valued at $1,325 were discovered during the physical count. These items were still recorded on 30 June 2023 but were omitted from the physical count records pending their write-off. Required: 1. Prepare any journal entries necessary on 30 June 2023 to correct any errors and to adjust inventories. 2. i) What does the term 'net realizable value' mean? (need at least 100 words) 2. ii) What sources of evidence could a company use to determine net realizable value? (need at least 200 words) 2. iii) What action should a company take at year-end if some of its inventory items have declined in value while other inventory items have increased in value? Why? (need at least 250 words)

Madhur L.

Transcript

00:01 So, the solution is the physical count of inventory on hand at december 31st, 2020 is $6493269 and the merchandise purchased from the browser for $28182 that was not included in the physical count.

01:10 So, we need to add it to the inventory.

01:14 So, the merchandise sold campy for $15435.

01:35 This was included in the inventory, but it should not be since it was sold.

01:41 So, we need to subtract it from inventory.

01:57 Then the merchandise received from dookley for $32823.

02:17 So, this was included in the inventory and it should be since was shipped from the fob destination.

02:28 Then the merchandise purchased from gloucester industries for $17934.

02:53 That was not included in the inventory.

02:57 So, we need to add it to the inventory...