Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

27. (3 points) Irene uses a calendar-year accounting period and a periodic inventory system. Assume Irene had the following independent situations: - Situation 1. Goods

image text in transcribed
27. (3 points) Irene uses a calendar-year accounting period and a periodic inventory system. Assume Irene had the following independent situations: - Situation 1. Goods shipped by Irene to a customer f.o.b. shipping point on 12-30-11 were in transit at 12-31-11. The goods cost $12,000,On123111, Irene billed the customer and recorded a credit sale of $25,000. - Situation 2. Goods shipped to Irene by a vendor fo.b. destination on 12-28-11 were in transit at 12-31-11. The goods cost $15,000. On 01-04-12, the day the goods arrived, Irene recorded a credit purchase of $15,000. - Situation 3. Goods shipped to Irene by a vendor f.o.b. shipping point on 12-28-11 were in transit at 12-31-11. The goods cost $40,000. On 01-03-12, Irene received the goods. On 12-31-11, Irene recorded a credit purchase of $40,000. - Situation 4. Goods shipped by Irene to a customer fo.b, shipping point on 12-29-11 were in transit at 12-31-11. The goods cost $25,000. The customer received the goods on 01-04-12. On 01-04-12, Irene billed the customer and recorded a credit sale of $60,000. - Situation 5. Goods shipped by Irene to a customer f.o.b. destination on 12-29-11 were in transit at 12-31-11. The goods cost $27,000. On 12-30-12, Irene billed the customer and recorded a credit sale of $65,000. The customer received the goods on 01 15-12. - Situation 6. On 12-31-11, Irene was in possession of $40,000 of goods that she was holding on a consignment basis. Irene received these goods on 12-24-11. Upon receipt of these goods, Irene recorded a credit purchase of $40,000. Assume Irene values the inventory reported on its balance sheet and the amount recorded as cost of goods sold on its income statement on the basis of its physical inventory count that Irene performed on 12-31-11. Irene counts whatever is on its premises. Individually discuss the effect (in doliars and direction, e.g, overstate, understate, no effect) that each of the above items has on: 7 Irene's sales revenue for the year ended 12-31-11 - Irene's cost of goods sold for the year ended 12-31-11 - Irene's accounts receivable as of 12-31-11 2. Irene's inventory as of 12-31-11 - Irene's accounts payable as of 12-31-11 - Irene's stockholders' equity as of 12-31-11

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

The Audit Process Principles Practice And Cases

Authors: Stuart Manson, Iain Gray, Louise Crawford

6th Edition

1408081709, 978-1408081709

More Books

Students also viewed these Accounting questions