FINANCIAL ACCOUNTING>IC<
15th Edition
ISBN: 9781119344988
Author: Kimmel
Publisher: WILEY C
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 6.2E
To determine
FOB Shipping point means that the buyer pays all costs incurred for the delivery of goods once the goods is left from the supplier’s warehouse.
FOB Destination means that the buyer pays all costs incurred for the delivery of goods once the goods is delivered at buyer receiving point.
To Determine: The correct inventory amount.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Farley Bains, an auditor with Nolls CPAs, is performing a review of Ryder Company’s Inventory account. Ryder Company did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $740,000. However, the following information was not considered when determining that amount.
Included in the company’s count were goods with a cost of $228,000 that the company is holding on consignment. The goods belong to Nader Corporation.
The physical count did not include goods purchased by Ryder Company with a cost of $40,000 that were shipped FOB shipping point on December 28 and did not arrive at Ryder Company’s warehouse until January 3.
Included in the Inventory account was $17,000 of office supplies that were stored in the warehouse and were to be used by the company’s supervisors and managers during the coming year.
The company received an order on December 29 that was boxed and was sitting on the…
Farley Bains, an auditor with Nolls CPAs, is performing a review of Teal Mountain Inc.’s Inventory account. Teal Mountain Inc. did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $808,200. However, the following information was not considered when determining that amount.
Ending inventory-as reported
$enter a dollar amount
1.
Included in the company’s count were goods with a cost of $224,170 that the company is holding on consignment. The goods belong to Nader Corporation.
enter a dollar amount
2.
The physical count did not include goods purchased by Teal Mountain Inc.with a cost of $38,530 that were shipped FOB shipping point on December 28 and did not arrive at Teal Mountain Inc.’s warehouse until January 3.
enter a dollar amount
3.
Included in the Inventory account was $18,300 of office supplies that were stored in the…
Kari Downs, an auditor with Wheeler CPAs, is performing a review of Waterway Company’s inventory account. Waterway did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $747,000. However, the following information was not considered when determining that amount.
Chapter 6 Solutions
FINANCIAL ACCOUNTING>IC<
Ch. 6 - The key to successful business operations is...Ch. 6 - Prob. 2QCh. 6 - What is just-in-time inventory management? What...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - What is the major advantage and major disadvantage...Ch. 6 - The selection of an inventory cost flow method is...
Ch. 6 - Which assumed inventory cost flow method: (a)...Ch. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 18QCh. 6 - Why is it inappropriate for a company to include...Ch. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - Prob. 22QCh. 6 - When perpetual inventory records are kept, the...Ch. 6 - How does the average-cost method of inventory...Ch. 6 - Prob. 25QCh. 6 - Prob. 6.1BECh. 6 - Prob. 6.2BECh. 6 - Prob. 6.3BECh. 6 - Prob. 6.4BECh. 6 - Prob. 6.5BECh. 6 - Prob. 6.6BECh. 6 - Prob. 6.7BECh. 6 - Prob. 6.8BECh. 6 - Prob. 6.9BECh. 6 - Prob. 6.10BECh. 6 - Prob. 6.11BECh. 6 - Prob. 6.1DIECh. 6 - Prob. 6.2DIECh. 6 - Prob. 6.3ADIECh. 6 - Prob. 6.3BDIECh. 6 - Prob. 6.1ECh. 6 - Prob. 6.2ECh. 6 - Prob. 6.3ECh. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Prob. 6.6ECh. 6 - Prob. 6.7ECh. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Prob. 6.11ECh. 6 - Prob. 6.12ECh. 6 - Prob. 6.13ECh. 6 - Inventory data for Jeters Company are presented in...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Prob. 6.1APCh. 6 - Prob. 6.2APCh. 6 - Prob. 6.3APCh. 6 - Prob. 6.4APCh. 6 - Prob. 6.5APCh. 6 - Prob. 6.6APCh. 6 - Prob. 6.7APCh. 6 - Prob. 6.8APCh. 6 - Prob. 6.9APCh. 6 - Prob. 6.1CACRCh. 6 - Prob. 6.1EYCTCh. 6 - Prob. 6.2EYCTCh. 6 - Prob. 6.3EYCTCh. 6 - Prob. 6.4EYCTCh. 6 - The July 15, 2010, edition of CFO.com contains an...Ch. 6 - Prob. 6.7EYCTCh. 6 - Prob. 6.8EYCTCh. 6 - Prob. 6.9EYCTCh. 6 - Prob. 6.10EYCTCh. 6 - Prob. 6.11EYCTCh. 6 - Prob. 6.1IFRSCh. 6 - Prob. 6.2IFRSCh. 6 - Prob. 6.3IFRS
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Shetland Company reported net income on the year-end financial statements of $125,000. However, errors in inventory were discovered after the reports were issued. If inventory was understated by $15,000, how much net income did the company actually earn?arrow_forwardIf Barcelona Companys ending inventory was actually $122,000, but the cost of consigned goods, with a cost value of $20,000 were accidentally included with the company assets, when making the year-end inventory adjustment, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?arrow_forwardIf Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?arrow_forward
- Suppose that an audit of Prime Sports Gear encountered the following two errors: a. Inventory totaling 4,500 should have been written off as worthless at the end of the year. Year-end inventory should be only 195,600. Net income is reduced to 117,110. b. Checks totaling 20,000 for some of the salaries payable at year-end had in fact been written and mailed out on December 31, 2013. Thus, both the cash account and the salaries payable account are overstated at year-end. Correct both errors on the worksheet. Save your completed file as CASHFLOW4. Print the worksheet when done. What impact did each of these adjustments have on cash flow for 2013?arrow_forwardBryce Company manufactures pet supplies. However, Bryces electronic accounting system recently crashed and, unfortunately, only a partial recovery of the companys year-end accounting records (which included several profitability ratios) was possible. As a result, Bryces controller, a bright young CMA named Jeanette, must compute various lost financial account balances using the recovered information listed below. Long-term liabilities: 1,500,000 Ending inventory is the same as beginning inventory. Gross margin: 3,000,000 Net sales: 8,000,000 Accounts receivable turnover: 50 Ending accounts receivable is the same as beginning accounts receivable. Total liabilities: 2,000,000 Current ratio: 2.5 Cash: 600,000 Quick ratio: 2.0 Inventory turnover in days: 3.65 Required: 1. Calculate current liabilities. 2. Calculate current assets. 3. Calculate average accounts receivable 4. Calculate marketable securities. 5. Calculate average inventory.arrow_forwardBhushan Company has been using LIFO for inventory purposes because it would prefer to keep gross profits low for tax purposes. In its second year of operation (20-2), the controller pointed out that this strategy did not appear to work and suggested that FIFO cost of goods sold would have been higher than LIFO cost of goods sold for 20-2. Is this possible? REQUIRED Using the information provided, compute the cost of goods sold for 20-1 and 20-2 comparing the LIFO and FIFO methods.arrow_forward
- Zaheer Abbas, an auditor with Saeed CPAs, is performing a review of K Company’s inventory account. K Company did not have a good year and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $37,000. However, the following information was not considered when determining that amount.1. Included in the company’s count were goods with a cost of $125,000 that the company is holding on consignment. The goods belong to S Corporation. 2. The physical count did not include goods purchased by K Company with a cost of $20,000 that were shipped FOB destination on December 28 and did not arrive at K Company’s warehouse until January 3. 3. Included in the inventory account was $8,500 of office supplies that were stored in the warehouse and were to be used by the company’s supervisors and managers during the coming year. 4. The company received an order on December 29 that was boxed and was sitting on the loading dock awaiting…arrow_forwardRachel Warren, an auditor with Laplante CPAs, is performing a review of Skysong, Inc.’s inventory account. Skysong, did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $748,000. However, the following information was not considered when determining that amount.Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number , e.g. -15,000, or parenthesis e.g. (15,000). Enter 0 if there is no effect.) Ending inventory-as reported $enter a dollar amount 1. Included in the company’s count were goods with a cost of $337,000 that the company is holding on consignment. The goods belong to Harmon Corporation. enter a dollar amount 2. The physical count did not include goods purchased by Skysong, with a cost of $47,000 that were shipped FOB…arrow_forwardFarley Bains, an auditor with Nolls CPAs, is performing a review of Splish Brothers Inc.’s Inventory account. Splish Brothers did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $774,190. However, the following information was not considered when determining that amount.Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesis e.g. -45 or parentheses e.g. (45).) Ending inventory-as reported $Enter a dollar amount 1. Included in the company’s count were goods with a cost of $216,010 that the company is holding on consignment. The goods belong to Nader Corporation. Enter a dollar amount 2. The physical count did not include goods purchased by Splish Brothers with a cost of $39,630 that were shipped FOB shipping point on December 28 and did not arrive at Splish…arrow_forward
- Farley Bains, an auditor with Nolls CPAs, is performing a review of Waterway Company’s Inventory account. Waterway did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $695,600. However, the following information was not considered when determining that amount.Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesis e.g. -45 or parentheses e.g. (45).) Ending inventory-as reported $Enter a dollar amount 1. Included in the company’s count were goods with a cost of $211,700 that the company is holding on consignment. The goods belong to Nader Corporation. Enter a dollar amount 2. The physical count did not include goods purchased by Waterway with a cost of $40,640 that were shipped FOB shipping point on December 28 and did not arrive at Waterway’s warehouse…arrow_forwardBramble Decor did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $735,000. However, the following information was not considered when determining that amount.Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number , e.g. -15,000, or parenthesis e.g. (15,000). Enter 0 if there is no effect.) Ending inventory-as reported $enter a dollar amount 1. Included in the company’s count were goods with a cost of $252,000 that the company is holding on consignment. The goods belong to Kroeger Company. enter a dollar amount 2. The physical count did not include goods purchased by Bramble with a cost of $42,000 that were shipped FOB destination on December 28 and did not arrive at Bramble warehouse until January 3. enter a dollar amount…arrow_forwardCandle Co. performs an inventory court at year - end. The company records a ending balance of $56,000 for inventory on its balance sheet. During the following year, the accountant discovers that the ending inventory was miscounted, causing ending inventory to be overstated by $2, 500. a. What is the effect of the misstatement on the income statement? b. Besides ending inventory, what was the effect of the error on the balance sheet?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengageExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
IAS 29 Financial Reporting in Hyperinflationary Economies: Summary 2021; Author: Silvia of CPDbox;https://www.youtube.com/watch?v=55luVuTYLY8;License: Standard Youtube License