Sterling Company reported their inventory as $50,700 on the books at December 31, 2021. At the close of the year, the auditors came in and identified the following issues: Product shipped to a customer December 28, 2021 f.o.b. destination costing $4,200, was not received by the customer until January 2022. The product was not included in the inventory balance because it was not in the warehouse.Samples costing $2,300 were delivered to a client for review on December 27, 2021. They are to be returned on January 5, 2022. They were not included in inventory because they were not in the warehouse.Purchases of product in the amount of $2,100 were in transit as of December 31, 2020. They had been shipped f.o.b. shipping point. They were not included in inventory because they were not in the warehouse.Product shipped to a customer December 28, 2020, f.o.b. shipping point cost $2,500. It was not received by the customer until January 2022. The product was not included in the inventory because it was not in the warehouse.

Name: Sterling Company reported their inventory as $50,700 on the books at D
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Description: Sterling Company reported their inventory as $50,700 on the books at December 31, 2021. At the close of the year, the auditors came in and identified the following issues: Product shipped to a customer December 28, 2021 f.o.b. destination costing $4,

Correct amount of inventory is the value of the inventory which has been computed on the basis of…

Answered: Sterling Company reported their…

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

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 13P: Errors As controller of Lerner Company, which uses a periodic inventory system, you discover the...

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Sterling Company reported their inventory as $50,700 on the books at December 31, 2021. At the close of the year, the auditors came in and identified the following issues:

Product shipped to a customer December 28, 2021 f.o.b. destination costing $4,200, was not received by the customer until January 2022. The product was not included in the inventory balance because it was not in the warehouse.
Samples costing $2,300 were delivered to a client for review on December 27, 2021. They are to be returned on January 5, 2022. They were not included in inventory because they were not in the warehouse.
Purchases of product in the amount of $2,100 were in transit as of December 31, 2020. They had been shipped f.o.b. shipping point. They were not included in inventory because they were not in the warehouse.
Product shipped to a customer December 28, 2020, f.o.b. shipping point cost $2,500. It was not received by the customer until January 2022. The product was not included in the inventory because it was not in the warehouse.

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