Crane Company sells TVs. The perpetual inventory was stated as $37,300 on the books at December 31, 2020. At the close of the year, a new approach for compiling inventory was used and apparently a satisfactory cut-off for preparation of financial statements was not made. Some events that occurred are as follows.1. TVs shipped to a customer January 2, 2021, costing $5,100 were included in inventory at December 31, 2020. The sale was recorded in 2021.2. TVs costing $15,900 received December 30, 2020, were recorded as received on January 2, 2021.3. TVs received during 2020 costing $4,000 were recorded twice in the inventory account.4. TVs shipped to a customer December 28, 2020, f.o.b. shipping point, which cost $9,400, were not received by the customer until January, 2021. The TVs were included in the ending inventory.5. TVs on hand that cost $6,700 were never recorded on the books.Compute the correct inventory at December 31, 2020.

Given that the inventory balance on the books as on Dec 31, 2020 = $37,300 Cut-off procedures has to…

Answered: Crane Company sells TVs. The perpetual…

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Chapter18: Accounting Periods And Methods

Section: Chapter Questions

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Crane Company sells TVs. The perpetual inventory was stated as $37,300 on the books at December 31, 2020. At the close of the year, a new approach for compiling inventory was used and apparently a satisfactory cut-off for preparation of financial statements was not made. Some events that occurred are as follows.

1.		TVs shipped to a customer January 2, 2021, costing $5,100 were included in inventory at December 31, 2020. The sale was recorded in 2021.
2.		TVs costing $15,900 received December 30, 2020, were recorded as received on January 2, 2021.
3.		TVs received during 2020 costing $4,000 were recorded twice in the inventory account.
4.		TVs shipped to a customer December 28, 2020, f.o.b. shipping point, which cost $9,400, were not received by the customer until January, 2021. The TVs were included in the ending inventory.
5.		TVs on hand that cost $6,700 were never recorded on the books.

Compute the correct inventory at December 31, 2020.

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