Question $7$ of $10$

$-12$

Current Attempt in Progress

Kari Downs, an auditor with Wheeler CPAs, is performing a review of Sunland Company's inventory account. Sunland did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at yearend was $$730,000.$ However, the following information was not considered when determining that amount.

$($a$1)$ Prepare a schedule to determine the correct inventory amount. $($If an amount reduces the account balance then enter with a negative sign preceding the number, es $-15,000,$ or parenthesis es$.(15,000).$ Enter O If there is no effect.$)$

Ending inventory$-$as reported

Included in the company's count were goods with a cost of $$247,000$ that the company is halding an consignment. The goods belang to Kraeger Corporation.

The physical count did not include goods purchased by Sunland with a cost of $$45,000$ that were shipped FOB destination on December $28$ and did not arrive at Sunland warehouse until January $3.$

Included in the imventory account was $$20,000$ of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.

The company received an order on December $29$ that was boxed and sitting on the loading dock awaiting pick$-$up on December $31.$ The shipper picked up the goods on January $1$ and dellivered them on January $6.$ The shipping terms were FOB shipping point. The goods had a selling price of $$41,000$ and a cost of $$24,000.$ The goods were not included in the count because they were sitting on the dock.

On December $29,$ Sunland shipped goods with a selling price of $$77,000$ and a cast of $$63\mathrm{.}000$ to Macchia Sales Corporation FOB shipping point. The goods arrived on Janwary $3.$ Macchia had anly ordered goods with a selling price of $$14,000$ and a cost of $$8,000.$ However, a sales manager at Sunland had authorized the shipment and said that if Macchia wanted to ship the goods back next week, it could.

Included in the count was $$32,000$ of goods that were parts for a machine that the company no longer made. Given the high$-$tech nature of Sunland's products, it was unlikely that these obsolete parts had any other use. However, management would prefer to keep them on the books at cost$,$ "since that is what we paid for them, after all."

$5$