Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2 of 3 Sarasota Limited is trying to determine the amount of its ending inventory as at August 3 1 , the company's year

Question 2 of 3
Sarasota Limited is trying to determine the amount of its ending inventory as at August 31, the company's year end. The accountant counted everything in the warehouse in early September, which resulted in an ending inventory amount of $133,100. However, the accountant was not sure how to treat the following transactions, so she did not include them in the count. She has asked for your he determining whether she should or should not include the following transactions in inventory:
Aug. 15 Sarasota had $1,690 of inventory isolated in the warehouse. The company isolated the goods because a customer did not want them shipped until September 6. The customer does not own the goods and will pay for them in September.
Aug. 19 Sarasota purchased goods FOB shipping point from a supplier. The inventory cost $1,740. The appropriate party paid the freight costs of $99. The supplier shipped the goods on August 29 and Sarasota received the goods on September 2.
Aug. 22 Sarasota purchased goods FOB destination from a supplier. The inventory cost $2,420. The appropriate party paid the freight costs of $630. The supplier shipped the goods on August 26 and Sarasota received the goods on September 3.
Aug. 23 Sarasota was holding inventory that it sold to a customer on August 23 that needed adjustments before the customer would take possession. The inventory cost $1,460 and the alterations, completed on August 25, cost $212. The customer plans to pick up the inventory on September 2.
Aug. 26 Sarasota received $10,000 of inventory on consignment from Temiskaming Manufacturers L td. By August 31, Sarasota had not sold any of this inventory.
Aug. 27 Sarasota shipped goods costing $4,500 FOB destination to a customer. The appropriate party paid the freight costs of $159 on September 5. The receiving report indicates that the customer received the goods on September 4.
Aug. 29 Sarasota shipped $8,340 of inventory on consignment to Chapleau Corporation. By August 31, Chapleau had sold 25% of this inventory for Sarasota.
Aug. 30 Sarasota shipped goods FOB shipping point to a customer. The inventory cost $2,580. The appropriate party paid the freight costs of $159. The receiving report indicates that the customer received the goods on September 3.
image text in transcribed

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

Swanson On Internal Auditing Raising The Bar

Authors: IT Governance Publishing

1st Edition

1849280673, 978-1849280679

More Books

Students also viewed these Accounting questions

Question

recognise typical interviewer errors and explain how to avoid them

Answered: 1 week ago

Question

identify and evaluate a range of recruitment and selection methods

Answered: 1 week ago

Question

understand the role of competencies and a competency framework

Answered: 1 week ago