CASE 1 - ADJUSTING ENTRIES FOR MERCHANDISING ACTIVITIES. Oman Maxo Electronics Company -

A Case study: Oman Maxo Electronics Company is engaged in merchandising business that sells electronic products and follows perpetual inventory system. The company exclusively sells laptops @ OMR 550 each. At the end of the year, the unadjusted books of records show that there are 8 laptops of OMR 4,400 (8 X 550), and OMR 9,000 in Cost of Goods Sold. The physical inventory count came to ________. ________ the number of physical inventory would be your number of birth month (Example: If January is your birth month, the number of physical inventory would be 1; If February is your birth month, the number of physical inventory would be 2 and so on. NOTE: Students must provide the proof of their birth month in the assignment answer sheet. You are Required to: 1. Identify the Overstatement / understatement of inventory. (1 Mark) 2. Pass necessary adjusting entry. (2 Marks) 3. Show the appropriate effect of adjustment in Companys books of records. (3 marks)