Part IInventory Cutoff

Only merchandise shipped by the Namtip to customers up to and including on December 30, 2015, has been eliminated from its inventory in its accounting records. The annual physical inventory count was taken on December 30, 2015 after the close of business has been recorded on the books by the companys controller. No perpetual inventory records for finished goods are maintained. All sales are made on an FOBshipping point basis. You are to assume that all purchase invoices have been correctly recorded.

The following lists of sales invoices are entered in the sales journal for the last part of December 2015 and first part of January 2016, respectively.

Sale	Sales Invoice Amount	Sales Invoice Date	Cost of Merchandise Sold	Date Shipped
December 2015
A	$ 3,000	Dec 21	$ 2,000	Dec 31
B	2,000	Dec 31	800	Dec 13
C	1,000	Dec 29	600	Dec 30
D	4,000	Dec 31	2,400	Jan 9
E	10,000	Dec 30	5,600	Dec 29*
January 2016
F	6,000	Dec 31	4,000	Dec 30
G	4,000	Jan 2	2,300	Jan 2
H	8,000	Jan 3	5,500	Dec 31

*sent to a consignee

Prepare the necessary proposed adjusting journal entry, in proper form, for each of the Sales (A through H). If no adjusting journal entry is necessary, you should write NO ADJUSTING ENTRY NEEDED in the space for that sale.

Part IIInventory Costing (Pricing)

Now you are performing costing (pricing) tests on a sample of the ending inventory. One of the items you selected for cost (price) testing is the orange widget, a significant part in the manufacture of Namtips main products. You noted that the 12/31/15 inventory record of the orange widgets consisted of 1,263 units (you previously verified that this agreed to the quantity indicated from the physical inventory) at $782 each for a total of $987,666.

Part II A. When you look at the invoices for the November and December purchases of the orange widgets, you see the following:

Date	Quantity	Unit Price		Total
11/03/15	1,000	$765	$765,000
11/22/15	500	770	385,000
12/03/15	800	777	621,600
12/28/15	600	782	469,200

Prepare the adjusting entry, in proper form, for the proper cost of orange widgets at December 31, 2015, assuming Namtip Ltd. uses the periodic FIFO method of inventory. Show supporting calculations as necessary.

Part II BIgnore part A. above. Assume you determined that the net realizable value for an orange widget is $775 per unit, while the net realizable value less a normal margin is $745 per unit.

Prepare the adjusting entry, in proper form, for the proper presentation of orange widgets at December 31, 2015 assuming you examined a vendor invoice dated December 31, 2015 for 500 orange widgets at $750 each for a total of $375,000. The units were ordered on December 29, 2015 and received on January 4, 2016. Show supporting calculations as necessary.