Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 3 (10 MARKS) Eclipse Optical Company received a consignment of optical lens costing $7,550 on Nov 15, 2020 from a supplier on the following

image text in transcribed

Question 3 (10 MARKS) Eclipse Optical Company received a consignment of optical lens costing $7,550 on Nov 15, 2020 from a supplier on the following term of 12% sales commission on cost. Between Nov 15 to December 31, Eclipse Optical sold $3,550 of the consigned goods. During the year end physical count of inventory, the $4,000 balance of the consignment optical lens was counted as part of the company's ending inventory. Required: a) Is the optical lens a part of Eclipse's ending inventory? Explain. (2 marks) b) How much of sales commission revenue did Eclipse earned on the consignment goods? (2 marks) c) Assuming that the decision to count the lens as part of Eclipse's ending inventory, show the effect of the inventory error on the following account is Overstated or Understated 1) Ending inventory 2) Current assets 3) Owner's equity Cost of goods sold Net income (6 marks)

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

Bookkeeping And Accounting For Beginners

Authors: D.K. Livingston

1st Edition

1686248598, 978-1686248597

More Books

Students also viewed these Accounting questions