Question

At December 31, Year 10, Bob's perpetual inventory shows $43,100 in the general ledger. Towards the end of Year 10, a new approach for compiling inventory was used and apparently a satisfactory cut-off for preparation of financial statements was not made. Some events that occurred are as follows:

1. Units shipped to a customer on January 2, Year 11, costing $6,000, were included in inventory at December 31, Year 10. The sale was recorded in Year 11.

2. Units costing $25,000 received December 30, Year 10, were recorded as received on January 2, Year 11.

3. Units received during Year 10, costing $4,300 were recorded twice in the general ledger.

4. Units shipped to a customer December 28, Year 10, FOB shipping point, which cost $14,000, were not received by the customer until January Year 11. The units were included in the ending inventory.

5. Units on hand that cost $5,600 were never recorded on the books.

6. Inventory balance of $43,100 in the general ledger includes $8,000 of goods held on consignment for Scoop.

Calculate the correct inventory at December 31, Year 10.

Answer 1

	Amount in $
Ending inventory as reported	43,100
1.) Shipped on January 2, year 11 & Sale was recorded in year 11 , hence no adjustment required.	-
2.) No recorded on December 30 hence added now	25,000
3.) Recorded twice, hence reduced one now	-4,300
4.) Shipped on December 28, included in books, hence reduced now	-14,000
5.) Never recorded, hence added now	5,600
6.) Inventory held on consignment basis not counted as inventory, hence reduced	-8,000
Correct inventory	47,400