Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

19. 100 Capwell Corporation uses a periodic inventory system. The company's ending inventory on December 31, 2013, its financial year end, based on a physical

image text in transcribed
image text in transcribed
19. 100 Capwell Corporation uses a periodic inventory system. The company's ending inventory on December 31, 2013, its financial year end, based on a physical count, was determined to be S326,000. Capwell's unadjusted trial balance also showed the following account balances: Purchases, $620,000 Accounts payable: $210,000; Accounts receivable, $225.000; Sales revenue, $840,000. The internal audit department discovered the following items: Goods valued at $32,000 held on consignment from Dix Company were included in the physical count but not recorded as a purchase. Purchases from Xavier Corporation were incorrectly recorded at $41,000 instead of the correct amount of $14,000. The correct amount was included in the ending inventory. 3Goods that cost$25,000 were shipped from a vendor on December 28, 2013. terms fo.b. destination. The merchandise arrived on January 3, 2014. The purchase and related accounts payable were recorded in 2013. "One inventory item was incorrectly included in ending inventory as 100 units, instead of the correct amount of 1,000 units. This item cost $40 per unit. SThe 2012 statement of financial position reported inventory of $352,000. The internal auditors discovered that a mathematical error caused this inventory to be understated by $62,000. This amount is considered to be material Goods shipped to a customer fo.b. destination on December 25, 2013, were received by the customer on January 4, 2014. The sales price was $40,000 and the merchandise cost $22,000. The sale and corresponding accounts receivable were recorded in 2013. Goods shipped from a vendor fo.b. shipping point on December 27, 2013, were received on January 3, 2014. The merchandise cost S18,000. The purchase was not recorded until 2014 Required Determine the correct amounts for 2013 ending inventory, purchases, accounts payable, sales revenue, and accounts receivable. (Omit the "S" sign in your response.) Ending inventory Calculate cost of goods sold for 2013. (omitthe "S" sign in your response.) of goods sold What was the effect of the error in ending inventory on 2012 before-tax income? (nput the amount as positive value. Omit the "S" sign in your response.) 2012 before-baaincome was lolokto

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

CIA Part 3 Business Knowledge For Internal Auditing 2021

Authors: MUHAMMAD ZAIN

1st Edition

B09B23JKZ8, 979-8739475527

More Books

Students also viewed these Accounting questions

Question

Choosing Your Topic Researching the Topic

Answered: 1 week ago

Question

The Power of Public Speaking Clarifying the

Answered: 1 week ago