Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please explain to me how to do this. Thank you so much. Penman Designs Inc. is trying to determine the value of its ending inventory

Please explain to me how to do this. Thank you so much.image text in transcribed

Penman Designs Inc. is trying to determine the value of its ending inventory at February 28, 2020, the company's year-end. The accountant counted everything that was in the warehouse as of February 28, which resulted in an ending inventory valuation of $48,000. However, she did not know how to treat the following transactions so she did not record them. (a) On February 26, Penman shipped to a customer goods costing $800. The invoice price was $1,350. The goods were shipped FOB destination, and the receiving report indicates that the customer received the goods on March 2. (b) On February 26, Nissim Inc. shipped goods to Penman FOB shipping point. The invoice price was $350. The receiving report indicates that the goods were received by Penman on March 2 (c) Penman had damaged goods set aside in the warehouse because they are no longer saleable. These goods cost $400 and Penman originally expected to sell these items for $600. (d) Penman had $300 of inventory on consignment at Uris Company. (e) On February 26, Penman ordered goods costing $780. The goods were shipped FOB destination on February 27. Penman received the goods on March 1. (f) On February 28, Penman packaged goods and had them ready for shipping to a customer FOB destination. The invoice price was $350; the cost of the items was $220. The receiving report indicates that the goods were received by the customer on March 2. Required: For each item above, determine whether the item should be (1) added to Penman's inventory, (2) subtracted from Penman's inventory, or (3) have no effect on Penman's inventory. Show your adjustments by writing the amount to be adjusted in (1), (2), or (3) below. If there is no effect on Penman's inventory, write 0 (zero)" in the column of (3) No effect." (1) Add to inventory (2) Subtract from inventory (3) No effect Item (a) (b) (c) (d) (e) (f)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing and Accounting Cases Investigating Issues of Fraud and Professional Ethics

Authors: Jay Thibodeau, Deborah Freier

4th edition

78025567, 978-0078025563

More Books

Students also viewed these Accounting questions