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Werth Company asks you to review its December 31, 2012




Question;Werth Company asks you to review its December 31, 2012;inventory values and prepare the necessary adjustments to the books. The;following information is given to you. 1. Werth uses the periodic method of;recording inventory. A physical count reveals $307,471 of inventory on hand at;December 31, 2012. 2. Not included in the physical count of inventory is;$13,640 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 Bubbey 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 $16,755 on December 31. The merchandise cost $9,621, and;Bubbey received it on January 3. 4. Included in inventory was merchandise;received from Dudley on December 31 with an invoice price of $20,460. 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 $11,179 of;merchandise purchased from Minsky 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 $13,663 of inventory held;by Werth on consignment from Jackel Industries. 7. Included in inventory is;merchandise sold to Sims f.o.b. shipping point. This merchandise was shipped;after it was counted. The invoice was prepared and recorded as a sale for;$24,740 on December 31. The cost of this merchandise was $15,080, and Sims;received the merchandise on January 5. 8. Excluded from inventory was a carton;labeled ?Please accept for credit.? This carton contains merchandise costing;$1,964 which had been sold to a customer for $3,403. No entry had been made to;the books to reflect the return, but none of the returned merchandise seemed;damaged. (a) Determine the proper inventory balance for Werth Company at;December 31, 2012. Inventory balance as on December 31, 2012 $ (b) Prepare any;correcting entries to adjust inventory to its proper amount at December 31;2012. Assume the books have not been closed. (If no entry is required, select;No entry" for the account titles and enter 0 for the amounts. Credit;account titles are automatically indented when amount is entered. Do not indent;manually.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. 6. 7.;8. Accounts Payable Accounts Receivable Allowance to Reduce Inventory to LIFO;Cash Cost of Goods Sold Inventory Inventory Over and Short No Entry Prepaid;Insurance Purchase Discounts Purchase Discounts Lost Purchase Returns and;Allowances Purchases Sales Returns and Allowances Sales Revenue Work-in-Process


Paper#42513 | Written in 18-Jul-2015

Price : $19