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7-5. End-of-period adjustments. boi వెంచం Local Hardware uses the periodic inventory method. At the end of the accounting period, the company takes a physical inventory and finds that $20,671 of goods are on hand. Purchases during the period were $76,216, and inventory at the beginning of the period was $25,632. Freight on merchandise coming into the business was $2,799, and returns of merchandise to suppliers amounted to $1,776. In the schedule below, record the journal entry to be made by Local at the end of the accounting period to close the old inventory and record the new one. 7-6. End-of-period adjustments. ba3 Gnu Company uses the perpetual method of recording inventory. Its records show the Inventory account balance of $15,889. A count of the inventory, however, finds only $14,278 of inventory on hand. Record the entry needed by Gnu to correct its records. Assume that inventory differences of more than 5% of the cost of inventory on hand will have a significant impact on the income statement amounts. Provide Gnu with at least three reasons for the difference in recorded and physical inventory amounts.

7-5. End-of-period adjustments. boi వెంచం Local Hardware uses the periodic inventory method. At the end of the accounting period, the company takes a physical inventory and finds that $20,671 of goods are on hand. Purchases during the period were $76,216, and inventory at the beginning of the period was $25,632. Freight on merchandise coming into the business was $2,799, and returns of merchandise to suppliers amounted to $1,776. In the schedule below, record the journal entry to be made by Local at the end of the accounting period to close the old inventory and record the new one. 7-6. End-of-period adjustments. ba3 Gnu Company uses the perpetual method of recording inventory. Its records show the Inventory account balance of $15,889. A count of the inventory, however, finds only $14,278 of inventory on hand. Record the entry needed by Gnu to correct its records. Assume that inventory differences of more than 5% of the cost of inventory on hand will have a significant impact on the income statement amounts. Provide Gnu with at least three reasons for the difference in recorded and physical inventory amounts.

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter6: Inventories
Section: Chapter Questions
Problem 1PB: FIFO perpetual inventory The beginning inventory at Dunne Co. and data on purchases and sales for a...
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7-5. End-of-period adjustments. boi వెంచం Local Hardware uses the periodic inventory method. At the end of the accounting period, the company takes a physical inventory and finds that $20,671 of goods are on hand. Purchases during the period were $76,216, and inventory at the beginning of the period was $25,632. Freight on merchandise coming into the business was $2,799, and returns of merchandise to suppliers amounted to $1,776. In the schedule below, record the journal entry to be made by Local at the end of the accounting period to close the old inventory and record the new one. 7-6. End-of-period adjustments. ba3 Gnu Company uses the perpetual method of recording inventory. Its records show the Inventory account balance of $15,889. A count of the inventory, however, finds only $14,278 of inventory on hand. Record the entry needed by Gnu to correct its records. Assume that inventory differences of more than 5% of the cost of inventory on hand will have a significant impact on the income statement amounts. Provide Gnu with at least three reasons for the difference in recorded and physical inventory amounts.
Transcribed Image Text:7-5. End-of-period adjustments. boi వెంచం Local Hardware uses the periodic inventory method. At the end of the accounting period, the company takes a physical inventory and finds that $20,671 of goods are on hand. Purchases during the period were $76,216, and inventory at the beginning of the period was $25,632. Freight on merchandise coming into the business was $2,799, and returns of merchandise to suppliers amounted to $1,776. In the schedule below, record the journal entry to be made by Local at the end of the accounting period to close the old inventory and record the new one. 7-6. End-of-period adjustments. ba3 Gnu Company uses the perpetual method of recording inventory. Its records show the Inventory account balance of $15,889. A count of the inventory, however, finds only $14,278 of inventory on hand. Record the entry needed by Gnu to correct its records. Assume that inventory differences of more than 5% of the cost of inventory on hand will have a significant impact on the income statement amounts. Provide Gnu with at least three reasons for the difference in recorded and physical inventory amounts.
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