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Please choose one letter choice from the selection list for each problem. Leppo Inc. is having the annual audit of its December 31, year 2
Please choose one letter choice from the selection list for each problem.
Leppo Inc. is having the annual audit of its December 31, year 2 by Arlo, CPA's. As part of the inventory audit, Arlo has discovered problems, as follows: of its December 31, year 2 financial statements performed tory audit, Arlo has discovered four potential cutoff ine company shipped merchandise (FOB destination) to a customer on December 2, year 2, and recorded the sale but not the relief of inventory. The customer received the merchandise on December 31, year2, 2. The company shipped merchandise (FOB shipping point) on December 3, year2, to a customer, and recorded the sale and relief of inventory. The customer, unhappy with the merchandise, returned the goods on December 29, year2. The company recorded the following entry upon receipt of the goods on December 30, year 2: Dr Inventory, CR Cost of Sales. 3. The company shipped merchandise to a consignee on December 16, year2, and did not record the transaction. The consignee returned the merchandise on December 28, year 2. Upon receipt of the goods, the company made the following entry: Dr Inventory, CR Sales. 4. The company shipped merchandise (FOB shipping point) on December 29, year2, and recorded relief of inventory, but not the sale, on that date. The customer has not received the merchandise and the company has not recorded the sale as of January 3, year 3. For each of the potential cutoff problems, choose the BEST adjustment from the list below, that Arlo should propose at December 31, year 2 to correct the accounts. Selecriox list G. # A. No adjustment necessary. B. Accounts receivable (dr.) Sales for.) C. Sales (dir.) Accounts receivable (er D. Inventory (dr.) Cost of sales (cr.) E. Cost of sales (dr) Inventory (cm.) F. Accounts receivable (dr.) Inventory le.) I Sales (dr.) Accounts receivable (cr.) Inventory (dr.) Cost of sales (cr.) Sales (dr.) Inventory (cr.) Accounts receivable (dr.) Sales (c.) Cost of sales (dr.) Inventory (cr.) Saies (dr.) Cost of sales (cr.) j. I W &Step by Step Solution
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