M Nguyen Associates, Inc is a specialty retailer offering high end professional clothes for accountants Following are some transactions Nguyen engaged in and other information during the month of November, 2020 (Nov 1) Nguyens beginning inventory balance (at FIFO cost) was $160,000 (Nov 2) Received shipment of an order of Italian suits at a cost of $25,000 from J Chen Importers, Ltd Shipping charges from Italy were an additional $500 The purchase was made on account (Nov 6) Received tailored clothes priced at $10,000 from J Lee Designs, Inc Nguyen is displaying those clothes in her boutiques for sale under a consignment agreement (Nov 15) Returned unsold suits costing $5,000 to J Chen Chen credited Nguyens account No refund was offered for the shipping charges (Nov 20) Sold clothing during the month to date on account for a total of $50,000 The clothes sold had a cost of $15,000 The sales included $800 for a skirt that was from J Lee Designs No cash was remitted on this date to J Lee Designs (Nov 25) Purchased more suits from J Chen Importers, Ltd at a cost of $30,000 The terms of the purchase indicated that the suits were being shipped f o b destination, with shipping charges of $600 The shipment had not arrived as of November 30 (Nov 30) Using competitive market price data, Nguyen determined that the expected selling price for their inventory on hand, less any costs to sell and deliver goods to their customers, is $150,000 Required Provide journal entries (as needed) to account for the transactions that occurred on November 2, 15, and 20 Provide the adjusting entry (if needed) to account for the market price information on November 30 After accounting for everything in November, show and explain what amount would appear in Nguyens November 30 Balance Sheet for inventory And briefly describe any disclosures that would be required in the Notes to the Financial Statements related to the inventory Briefly describe the conceptual reason why an adjustment might be required at November 30 based on the market price information

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 20, 2024

M. Nguyen & Associates, Inc. is a specialty retailer offering high-end professional clothes for accountants. Following are some transactions Nguyen engaged in and other information

M. Nguyen & Associates, Inc. is a specialty retailer offering high-end professional clothes for accountants. Following are some transactions Nguyen engaged in and other information during the month of November, 2020:

(Nov. 1) Nguyens beginning inventory balance (at FIFO cost) was $160,000.
(Nov. 2) Received shipment of an order of Italian suits at a cost of $25,000 from J. Chen Importers, Ltd. Shipping charges from Italy were an additional $500. The purchase was made on account.
(Nov. 6) Received tailored clothes priced at $10,000 from J. Lee Designs, Inc. Nguyen is displaying those clothes in her boutiques for sale under a consignment agreement.
(Nov. 15) Returned unsold suits costing $5,000 to J. Chen. Chen credited Nguyens account. No refund was offered for the shipping charges.
(Nov. 20) Sold clothing during the month to date on account for a total of $50,000. The clothes sold had a cost of $15,000. The sales included $800 for a skirt that was from J. Lee Designs. No cash was remitted on this date to J. Lee Designs.
(Nov. 25) Purchased more suits from J. Chen Importers, Ltd. at a cost of $30,000. The terms of the purchase indicated that the suits were being shipped f.o.b. destination, with shipping charges of $600. The shipment had not arrived as of November 30.
(Nov. 30) Using competitive market price data, Nguyen determined that the expected selling price for their inventory on hand, less any costs to sell and deliver goods to their customers, is $150,000.

Required:

Provide journal entries (as needed) to account for the transactions that occurred on November 2, 15, and 20.
Provide the adjusting entry (if needed) to account for the market price information on November 30.
After accounting for everything in November, show and explain what amount would appear in Nguyens November 30 Balance Sheet for inventory. And briefly describe any disclosures that would be required in the Notes to the Financial Statements related to the inventory.
Briefly describe the conceptual reason why an adjustment might be required at November 30 based on the market price information.