Layne Corporation, a manufacturer of small tools, provided the following information from its accounting records for the year ended December 31, 2007:
Inventory at December 31, 2007 (based on physical
count of goods in Layne’s plant at cost on December 31, 2007) .... $1,750,000
Accounts payable at December 31, 2007 .............. 1,200,000
Net sales (sales less sales returns) ................ 8,500,000
Additional information is as follows:
1. Included in the physical count were tools billed to a customer FOB shipping point on December 31, 2007. These tools had a cost of $28,000 and had been billed at $35,000. The shipment was on Layne’s loading dock waiting to be picked up by the common carrier.
2. Goods were in transit from a vendor to Layne on December 31, 2007. The invoice cost was $50,000, and the goods were shipped FOB shipping point on December 29, 2007.
3. Work-in-process inventory costing $20,000 was sent to an outside processor for plating on December 30, 2007.
4. Tools returned by customers and held pending inspection in the returned goods area on December 31, 2007 were not included in the physical count. On January 8, 2008 the tools costing $26,000 were inspected and returned to inventory. Credit memos totaling $40,000 were issued to the customers on the same date.
5. Tools shipped to a customer FOB destination on December 24, 2007 were in transit at December 31, 2007 and had a cost of $25,000. Upon notification of receipt by the customer on January 2, 2008, Layne issued a sales invoice for $42,000.
6. Goods, with an invoice cost of $30,000, received from a vendor at 5:00 p.m. on December 31, 2007, were recorded on a receiving report dated January 2, 2008. The goods were not included in the physical count, but the invoice was included in accounts payable at December 31, 2007.
7. Goods received from a vendor on December 24, 2007 were included in the physical count. However, the related $60,000 vendor invoice was not included in accounts payable at December 31, 2007 because the accounts payable copy of the receiving report was lost.
8. On January 4, 2008, a monthly freight bill in the amount of $4,000 was received. The bill specifically related to merchandise purchased in December 2007, one-half of which was still in the inventory at December 31, 2007. The freight charges were not included in either the inventory or in accounts payable at December 31, 2007.

Required
Prepare a schedule of adjustments as of December 31, 2007 to the initial amounts in inventory, accounts payable, and sales. Show separately the effect, if any, of each of the eight transactions on the December 31, 2007 amounts. Indicate if the transactions would have no effect on the initial amount shown.