For this assignment, please complete Assignment #4, "Inventory of Newsprint, Newsprint Consumption and Publication Sales," in the Valley Publishing Company text. Once the work is completed, please have 1 group member upload the group's completed work. The work papers are as follows: C/Memo, C-1 and supporting work to C-1, C-2, C-3 and supporting work to C-3. Please also provide a list of adjusting entries.

C-1 AH JW VALLEY PUBLISHING COMPANY #131 - Inventory 12/31/20x2 [Prepared by client] ITEM -------------- -------------Newsprint - yellow: 34" 600 lbs. each NUMBER ROLLS ------- 1/28/x3 TOTAL TONS ------- PER TON COST ------- AMOUNT ------- 90 27 q 508 p 13,716 * Newsprint - pink: 17" 300 lbs. each 60 9q 523 p 4,707 * Newsprint - glossy: 34" 600 lbs. each 17" 300 lbs. each 70 7 21 q 1 565 p 565 p Newsprint - white: 34" 600 lbs. each 17" 300 lbs. each 777 313 233 q 47 q 521 p 521 p Total Inventory in warehouse In transit - pink: 17" 300 lbs. each 338 133 524 10,480 358 AJE-C 3 Additional In transit - white: 34" 600 lbs. each 167 50 ADJUSTED BALANCE 468 AJE-C 1 408 T * FIFO pricing traced to voucher listing and vouchers, includes freight Quantities traced to inventory observation, C-2 q 188,022 T/B 1 T (1,000) X2 23,400 210,422 Footings checked Extensions checked p 121,393 * 24,485 * 177,542 *X2 20 Total Inventory, 12/31/20x2 11,676 * X1 565 * X1 Extension error, immaterial As per above 11,676 Should be 11,865 Difference 189 X2 Extension error, AJE-C 3 As per above 177,542 Should be 176,542 Difference (1,000) C-2 AH JW VALLEY PUBLISHING COMPANY #131 - Inventory Observation 12/31/20x2 1/28/x3 ITEM COUNTED NUMBER ROLLS WEIGHT [X] EA. ROLL TOTAL TONS Newsprint - white 34" Newsprint - white 17" 777 313 600 300 233 47 Newsprint - yellow 34" 90 600 27 Newsprint - glossy 34" Newsprint - glossy 17" 70 7 600 300 21 1 Newsprint - pink 17" 60 300 9 NOTE: Inventory observed after press-run on Wednesday, December 31, 20x2 -- 100% test count. [X] q Actual manufacturers' weights stamped on unopened rolls. Descriptions and quantities traced inventory, C-1. AH 1/12/x3 INVENTORY CUT-OFF DATA [w] Last receiving information was dated December 15, 20x2, for 167 rolls of 17" white newsprint from National Newsprint Corporation. w Traced to Voucher 12-19 Properly included as a 20x2 purchase. AH 1/12/x3 C-3 AH JW VALLEY PUBLISHING COMPANY #811 - Newsprint and Ink 12/31/20x2 1/28/x3 DESCRIPTION TONS Books Adjusted Beginning Inventory 340 340 Purchases 1190 w Available for sale DOLLARS Books Adjusted 175,856 175,856 P 1240 637,595 w 660,995 1,530 1,580 813,451 836,851 (358) (408) 1,172 1,172 Ending Inventory Inventory consumed and burned (188,022) C-1 625,429 (210,422) C-1 626,429 QUANTITY CONSUMED: FIRE LOSS: (51) F Total Consumed 1.5% Average adjusted cost of ink T COMPUTED NEWSPRINT AND INK Difference, adjusted balance less than 1%, not material TOTAL PER TRIAL BALANCE, UNADJUSTED AJE-C 3 AJE-C 4 TOTAL PER TRIAL BALANCE, ADJUSTED (26,468) F 625,429 8,984 s 599,961 8,999 634,413 (484) 608,960 1,919 633,897 TB/4 1,000 (24,018) F 610,879 TB/4 P Per prior years work papers w Traced to vouchers and total per voucher register s Adjusted for fire loss F FIRE LOSS CALCULATION: Number of issues per year 313 C-4 Multipiled by ABC adjusted circulation 14,274 C-4 Total issues 4,467,699 Muliplied by lbs per issue 0.502 Lbs by circulation 2,242,785 Divided by lbs per ton 2,000 Tonnage by circulation 1,121 Tonnage consumed per above 1,172 EST FIRE LOSS TONNAGE (51) TOTAL EST FIRE LOSS (26,468) r Settlement received 2,450 Remaining Est Loss (24,018) AJE-C 4 r Voucher 8-22 had 50 tons at $519. Assuming white paper is stored together and only white paper was destroyed, the next previous invoice for white paper bought was Voucher 7-04 at $518 per ton. C-5 VALLEY PUBLISHING COMPANY Inventory Observation Memo 12/31/20x2 AH JW 1/28/x3 I was present on Wednesday, December 31, 20x2 for observing the client's physical inventory. The physical inventory was taken after the press-run for the Wednesday issue. I observed client personnel taking a 100% physical inventory of newsprint by newsprint by listing number of rolls in 17\" or 34\" widths, by colors and weights of each roll. Partial rolls were estimated. As I observed physical inventory, I recorded test counts of all inventoried, C-2. Valley Publishing suffered a fire loss in 20x2 during the move to a new building. This fire loss was relatively small. Per analytical procedures, the amount of newsprint destroyed has been estimated to be worth $26,468. The insurance company has previously given Valley Publishing a settlement for $2,450. The remaining amount are accounted for in a receiveable-insurance claim account under adjusting entries. In my opinion, the client used good inventory procedures and took an adequate inventory. The personnel taking the inventory were competent. The yellow newsprint in inventory has still never been used, even though the client said it was going to be used last year. I do believe an allowance for obsolescence is necessary on this paper this year. The newsprint was arranged so that no rolls were omitted or counted more than once. The client maintained control of inventory cut-off. GREAT JOB Adrienne Hart 112x3