Question E8-1 and E 8-2
423 8E8-9 04) Ama lix ues the dullar-value LIFO method of coemputing its inventory. Data for the past 3 years follow Year Ended December 31ory at Curveet Year o Price Indes 2018 114 comprir ?e value odthe 2017and 20s inventories usingthedollarealueuro method -10 R Bienvenu Enterprises reported cost of goods sold for 2017 of $1,400,000 and netained earnings of $5,.20au at Decemmber 31, 2007 Bienvenu laber discovered that its ending inventories at December 31. 2016 and 2017, were overstabed smoooo afd S35???. respectively Determine the corrected amounts for 2017 east of goods-old and pember 31 retained esenings EXERCISES E8-1 1Loay anventoriable Goods and Costs) Presented belowe is a list of iteems that may or may not be mported as inventory in a company's December 31 balance sheet Goods out on consignment at another com 2 Goods sold on an installment basis (bad debts can be reasonably estimated). s Goods punchased fab. shipping point that are in transit at December 31. L Goods purchased Eab. destination that are in transit at December 32 pany's stone t company, for which our company has signed an agrowment to repunchase at a set price that covers all costs related to the inventory s Goods sold where large neturns are predictable . Goods sold Lob shipping point that are in transit at December 31 S. Feeight charges on goods purchased. Interest costs incurred for inventories that are routinely manufactured. 1d. Costs incurred to advertise goods held for resale. 11. Materials on hand not yet placed into production by a manvafacturing firm 12. Office supplies materials on which a manufacturing firm has started production but which are not completely processed. 14. Factory supplies 15. Goods held on consignenent from another company 16. Costs identified with units completed by a manufacturing fim but not yet sold. 17. Goods sold fob. destination that are in transit at December 31. 1&. Short-term investments in stocks and bonds that will be resold in the near future, Indicate which of these items would typically be reported as invenbory in the financial statements. If an item should not be reported as invenkory. Indicate how it should be ported in he financiai statenernta should not be E8-2 802) EXCEL Iaventoriable Goods and Costs) In your audit of Jose Oliva Company, you find that a physical inven tory on December 31, 201 ing items were all excladed from the $441,000 1. Merchandise of $61,000 which is held by Oliva on consignment. The consignor is the Max Suzuki Company. 2. Menchandise costing $38,000 which was shipped by Oliva tob destination to a customer on December 31, 2017. The cus- 3. Merchandise costing S46,000 which was shipped by Oliva fob, shipping point to a customer on December 29, 2017. 4. Merchandise costing $83,000 shipped by a vendor f.o.b. destination on December 30, 2017, and received by Oliva on s. Merchandise costing $51,00 shipped by a vendoe tab shipping point on December 31, 2017, and received tomer was expected to receive the merchandise on January 6, 2018. customer was scheduled to receive the merchandise on Jansuary 2, 2018 ary 4, 2018 January 5, 2018 The and received by Oliva on
