Description of this paper

Capwell Corporation uses a periodic inventory system. The company's ending inventory on December 31, 2013, its fiscal-year end, based on a physical count, was determined to be $326,000. Capwell's unadjusted trial balance also showed the following account

Description

solution


Question

Capwell Corporation uses a periodic inventory system. The company's ending inventory on December 31, 2013, its fiscal-year end, based on a physical count, was determined to be $326,000. Capwell's unadjusted trial balance also showed the following account balances: Purchases, $620,000, Accounts payable, $210,000, Accounts receivable, $225,000, Sales revenue, $840,000.;The internal audit department discovered the following items;1. Goods valued at $32,000 held on consignment from Dix Company were included in the physical count but not recorded as a purchase.;2. Purchases from Xavier Corporation were incorrectly recorded at $41,000 instead of the correct amount of $14,000. The correct amount was included in the ending inventory.;3. Goods that cost $25,000 were shipped from a vendor on December 28, 2013, terms f.o.b. destination. The merchandise arrived on January 3, 2014. The purchase and related accounts payable were recorded in 2013.;4. One inventory item was incorrectly included in ending inventory as 100 units, instead of the correct amount of 1,000 units. This item cost $40 per unit.;5. The 2012 balance sheet reported inventory of $352,000. The internal auditors discovered that a mathematical error caused this inventory to be understated by $62,000. This amount is considered to be material.;Goods shipped to a customer f.o.b. destination on December 25, 2013, were received by the customer on January 4, 2014. The sales price was $40,000 and the merchandise cost $22,000. The sale and corresponding accounts receivable were recorded in 2013.;7.;Goods shipped from a vendor f.o.b. shipping point on December 27, 2013, were received on January 3, 2014. The merchandise cost $18,000. The purchase was not recorded until 2014.;Required;1.;Determine the correct amounts for 2013 ending inventory, purchases, accounts payable, sales revenue, and accounts receivable.;Ending inventory $;Purchases $;Accounts payable $;Accounts receivable $;Sales revenue $ Required;1.;Determine the correct amounts for 2013 ending inventory, purchases, accounts payable, sales revenue, and accounts receivable.;Ending inventory $;Purchases $;Accounts payable $;Accounts receivable $;Sales revenue $;2. Calculate cost of goods sold for 2013.;Cost of goods sold $;3.;What was the effect of the error in ending inventory on 2012 before-tax income? (Input the amount as positive value.);2012 before-tax income was by $ 2. Calculate cost of goods sold for 2013.;Cost of goods sold $;3.;What was the effect of the error in ending inventory on 2012 before-tax income? (Input the amount as positive value.);2012 before-tax income was by $

 

Paper#77092 | Written in 18-Jul-2015

Price : $22
SiteLock