how do I get the beginning inventory out of this?
Capwell Corporation uses a periodic inventory system. The
company's ending inventory on December 31, 2021, its fiscal-year
end, based on a physical count, was determined to be $337,000.
Capwell's unadjusted trial balance also showed the following
account balances: Purchases, $730,000; Accounts payable; $265,000;
Accounts receivable, $280,000; Sales revenue, $910,000.
The internal audit department discovered the following items:
- Goods valued at $43,000 held on consignment from Dix Company
were included in the physical count but not recorded as a
- Purchases from Xavier Corporation were incorrectly recorded at
$63,000 instead of the correct amount of $36,000. The correct
amount was included in the ending inventory.
- Goods that cost $36,000 were shipped from a vendor on December
28, 2021, terms FOB destination. The merchandise arrived on January
3, 2022. The purchase and related accounts payable were recorded in
- One inventory item was incorrectly included in ending inventory
as 210 units, instead of the correct amount of 1,550 units. This
item cost $40 per unit.
- The 2020 balance sheet reported inventory of $462,000. The
internal auditors discovered that a mathematical error caused this
inventory to be understated by $73,000. This amount is considered
to be material. Comparative financial statements will be
- Goods shipped to a customer FOB destination on December 25,
2021, were received by the customer on January 4, 2022. The sales
price was $51,000 and the merchandise cost $27,500. The sale and
corresponding accounts receivable were recorded in 2021.
- Goods shipped from a vendor FOB shipping point on December 27,
2021, were received on January 3, 2022. The merchandise cost
$29,000. The purchase was not recorded until 2022.