ren, an audtor with Laplante CPAs, is performing a review of kKingbird, Inc.-s i
ID: 2537328 • Letter: R
Question
ren, an audtor with Laplante CPAs, is performing a review of kKingbird, Inc.-s inventory account. Kingbied, Inc. did not have a good year, and top management is under pressure te boost to its records, the inventory balance at year-end was $810,000. However, the following informationwas not considered when determining that amount. Prepare a schedule to determine correct parenthesis e.g. (35,000). Enter o if there is no effect. the correct inventory amount.(f an amouet rednces the account balance then enter with a negative sign preceding the nember, e.g. 15,000, or Ending inventory-as reported Included in the company's count were goods with a cest of $228,000 that the cempany is holding on consignment. 1. The goods belang to Harmon Corporation 2. The physical count did not include goods purchased by Kingbird, Inc. with acost of $47,000 that were shipped FOB destination on December 28 and did not anive at Kingbird, Inc.s warehouse until Jamuary 3 3. Included in the inventory account was $18,100 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 s. The company received an order on December 29 that was boxed and sitting on the loading dack awaiting The shippng terms were FOB shipping pont. The goods had a seling price of .500 and a cost d $36,500. The goods were not incladed in the count because they were sitting on the dock. S. On December 29, Kingbird, Inc. shioped goods with a selling price of $81,000 and a cost of $59,000 to Reza Sales Corporation FOB shipping point. The goods arrived on January 3. Reza had only eedered goeds with a selling price of $10,500 and a cost of $9,000. However, a sales manager at Kingbird, Inc. had authorized the shipment and said that if Reza wanted to ship the goods back next week, it could 6, Included in the count was $32,000 of gsods that were parts for a mechine that the company no longer made. Given the high-tech nature e here to searchExplanation / Answer
Answer
Schedule to determine the correct inventory amount:
S.no. Particulars Amount Ending inventory-as reported (Incorrect Inventory) $810000 1. Less:Goods held on Consignment basis ($228000) 2 Add:Goods in Transit $47000 3 Less:Office Supplies included in Inventory ($18100) 4 Add:FOB shipping term sales in january $36500 5 No adustment: Corrctly recorded - 6 Less:Goods related with machine as fixed assets ($32000) Correct Inventory $615400Related Questions
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