Reconciliation of Inventory Records As part of a test of inventory control, you examined the perpetual-inventory records of stockroom M. A full set of records (subsidiary and control) is maintained in the factory, while a controlling account is also kept in the accounting department.

You are required to set up a summarizing schedule in money amounts that simultaneously reflects the flow of materials (starting with initial inventory and ending with final inventory) and reconciles the accountingdepartment records with those of the factory in regard to opening inventory, receipts, withdrawals of materials, and ending inventory.

The items to be considered in preparing this schedule are as follows:

1. Receipts of materials in stockroom M, entered properly on factory records but treated by the accounting department as stockroom N, $240.

2. Correction made by the accounting department of an error in a prior period.

The error was the recording of an $800 withdrawal of materials as $500.

The original item had been correctly entered by the factory record clerk.

3. A shortage of item M-143, amounting to $45, which was noted and entered during the period on the factory records but information on which had not been transmitted to the accounting department.
4. An initial inventory, according to factory records, of $11,000 in stockroom M. Receipts were $14,000 and withdrawals were $13,000, according to the records of the accounting department. lop5