Question
Analysis Provided by the Independent Review (pre-audit): Note: paragraphs labeled with an initial letter in parentheses (like (b)) are the items for which a GAAP
Analysis Provided by the Independent Review (pre-audit): Note: paragraphs labeled with an initial letter in parentheses (like (b)) are the items for which a GAAP compliance issue was identified. Product-Related Revenue: During 2021, TouchBase had the following sales of these items: Item Quantity Unit Price Recorded in Account TouchTop laptop computers 960 $1,495 Revenue - TouchTop TouchLet tablet computers 320 $495 Revenue - TouchLet Other hardware items Total value = $97,500 Revenue - Hardware Software Total value = $57,000 Revenue - Software Extended warranty* 240 $195 Revenue - Warranty Promotion package* 400 $1,595 Revenue - Promo * see explanations below Product Sales, Inventory and Cost of Goods Sold: TouchBase uses a periodic inventory system and plans to use a FIFO approach when it adopts GAAP for 2021.
(a) TouchTop laptop computers Provided on worksheet (a) is a summary of inventory-related activity for TouchTop laptop computers during 2021. All regular (non-promo) sales were recorded at the same sales price of $1,495 per unit, recorded in the Revenue TouchTop account. Revenue from TouchTops sold under the promo package (see paragraph (d) below) were included in the amount recorded in Revenue Promo. All inventory was purchased on credit, and was recorded immediately in the COGS TouchTop account. The $455,175 value of the TouchTop computers counted at the end of 2020 was recorded in the Inventory TouchTop account, which was not changed during 2021
THE QUESTION: Something done is a) is incorrect. I need to know the correct JE and what the issue was.. there is no direct question. You to figure out what was done wrong with accordance to GAP
TouchTop Activity | Purch. Qty | Unit Cost | Non-Promo Sales Qty | Non-Promo Price | Non-Promo Revenue | Promo Sales Qty | Promo Price | Promo Revenue | ||
Beg. Inv. | 450 | $1,011.50 | ||||||||
1st Qtr Sales | 207 | $1,495.00 | $309,465 | 86 | ||||||
4/1 Purchase | 410 | $1,019.60 | ||||||||
2nd Qtr Sales | 217 | $1,495.00 | $324,415 | 97 | ||||||
7/1 Purchase | 470 | $1,024.70 | ||||||||
3rd Qtr Sales | 207 | $1,495.00 | $309,465 | 84 | ||||||
10/1 Purchase | 630 | $1,034.90 | ||||||||
4th Qtr Sales | 329 | $1,495.00 | $491,855 | 133 | ||||||
TOTAL QTYs | 1,960 | 960 | $1,435,200 | 400 | ||||||
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