1. (7 points) Irene uses a calendar-year accounting period and a periodic inventory system. Assume Irene had the following independent situations:

• Situation 1. 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 $15,000. On 01-03-12, Irene received the goods. On 01-03-12, Irene recorded a credit purchase of $15,000.
• Situation 2. Goods shipped to Irene by a vendor f.o.b. destination on 12-28-11 were in transit at 12-31-11. The goods cost $7,000. On 01-04-12, the day the goods arrived, Irene recorded a credit purchase of $7,000.
• Situation 3. Goods shipped to Irene by a vendor f.o.b. shipping point on 12-29-11 were in transit at 12-31-11. The goods cost $9,000. On 01-03-12, the day the goods arrived, Irene recorded a credit purchase of $9,000.
• Situation 4. 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 $10,000. On 12-31-11, Irene billed the customer and recorded a credit sale of $20,000.
• Situation 5. Goods shipped by Irene to a customer f.o.b. shipping point on 12-29-11 were in transit at 12-31-11. The goods cost $20,000. The customer received the goods on 01-04-12. On 01-04-12, Irene billed the customer and recorded a credit sale of $45,000.
• Situation 6. 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 $12,000. On 12-30-12, Irene billed the customer and recorded a credit sale of $30,000. The customer received the goods on 01-15-12.
• Situation 7. On 12-31-11, Irene was in possession of $25,000 of goods that she was holding on a consignment basis. Irene received these goods on 12-29-11. Upon receipt of these goods, Irene recorded a credit purchase.

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 dollars and direction, e.g., overstate, understate, no effect) that each of the above items has on:

• Irenes sales revenue for the year ended 12-31-11
• Irenes cost of goods sold for the year ended 12-31-11
• Irenes accounts receivable as of 12-31-11
• Irenes inventory as of 12-31-11
• Irenes accounts payable as of 12-31-11
• Irenes stockholders equity as of 12-31-1

Situation #	Is sales for year ended 12-31-11	Is COGS for year ended 12-31-11	Is AR as of 12-31-11	Is inventory as of 12-31-11	Is AP as of 12-31-11	Is SE as of 12-31-11
1
2
3
4
5
6
7

Remember, each box above should have BOTH an effect AND a $ amount.