Question

URGENT! You are engaged to audit Tesla Corporation for the year ended December 31, 2019. Inventory was counted on December 30 and only merchandise shipped by Tesla Corporation to customers up to and including December 30, 2019, has been eliminated from inventory. The inventory as determined by physical inventory count has been recorded on the books by the company’s controller. No perpetual inventory records are maintained. All sales are made on an FOB–shipping point basis. You are to assume that all purchase invoices have been correctly recorded. All sales are made on account.

The following lists of sales invoices are entered in the sales journal for the months of December 2019 and January 2020, respectively.

		Sales Invoice Amount			Sales Invoice Date		Cost of Merchandise Sold			Date Shipped
December 2019
a.		$	4,000		Dec. 21		$	2,500		Dec. 31
b.			2,000		Dec. 30			1,800		Dec. 30
c.			4,900		Dec. 31			2,400		Jan. 2
d.			9,000		Dec. 30			5,250		Dec. 29*
January 2020
e.		$	7,700		Jan. 1		$	5,100		Dec. 30
*Shipped to consignee.

Required:

Prepare necessary adjusting entries for the following events. (Leave no cells blank. If no entry is required, select "No journal entry required" in the account field and enter zero (0) in the amount field. Omit the "$" sign in your response.)

Event	General Journal	Debit	Credit
a.
b.
c.
d.
e.

Answer 1

Event	General Journal	Debit	Credits
a.	Cost of merchandise sold	2500
	Merchandise inventory		2500
b.	No journal entry required	0
	No journal entry required		0
c.	Sales	4900
	Accounts receivable		4900
d.	Sales	9000
	Goods sent on consignment		9000
	Merchandise inventory	5250
	Cost of merchandise sold		5250
e.	Accounts receivable	7700
	Sales		7700