Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 6-02 Farley Bains, an auditor with Nolls CPAs, is performing a review of Sweet Acacia Company's Inventory account. Sweet Acacia did not have a
Exercise 6-02 Farley Bains, an auditor with Nolls CPAs, is performing a review of Sweet Acacia Company's Inventory account. Sweet Acacia did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $793,920. However, the following information was not considered when determining that amount. Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce Inventory with a negative sign or parenthesise.g. -45 or parentheses e.g. (45).) Ending inventory-as reported 1. Included in the company's count were goods with a cost of $225,250 that the company is holding on consignment. The goods belong to Nader Corporation. 2. The physical count did not include goods purchased by Sweet Acacia with a cost of $40,080 that were shipped FOB shipping point on December 28 and did not arrive at Sweet Acacia's warehouse until January 3. 3. Included in the Inventory account was $18.120 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. 4. The company received an order on December 29 that was boxed and was sitting on the loading dock awaiting pick-up on December 31. The shipper picked up the goods on January 1 and delivered them on January 6. The shipping terms were FOB shipping point, The goods had a selling price of $41,350 and a cost of $26,970. The goods were not included in the count because they were sitting on the dock
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started