Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The December 31, 2021, inventory of Tog Company, based on a physical count, was determined to be $454,000. Included in that count was a shipment

image text in transcribed
image text in transcribed
The December 31, 2021, inventory of Tog Company, based on a physical count, was determined to be $454,000. Included in that count was a shipment of goods received from a supplier at the end of the month that cost $54,000. The purchase was recorded and paid for in 2022. Another supplier shipment costing $22,000 was correctly recorded as a purchase in 2021. However, the merchandise shipped FOB shipping point, was not received until 2022 and was incorrectly omitted from the physical count. A third purchase, shipped from a supplier FOB shipping point on December 28, 2021, did not arrive until January 3, 2022. The merchandise, which cost $84,000, was not included in the physical count and the purchase has not yet been recorded. The company uses a periodic inventory system Required: 1. Determine the correct December 31, 2021, inventory balance and, assuming that the errors were discovered after the 2021 financial statements were issued analyze the effect of the errors on 2021 cost of goods sold, net income, and retained earnings. (Ignore Income taxes.) 2. Prepare a journal entry to correct the errors. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the correct December 31, 2021, inventory balance and, assuming that the errors were discovered after the 2021 financial statements were issued, analyze the effect of the errors on 2021 cost of goods sold, net income, and retained earnings (Ignore income taxes.) Effect Amount Correct ending inventory Cost of goods sold Net income Retained carings Recured Required 2 > WYMIEMY TUN Required 1 Required 2 Prepare a journal entry to correct the errors. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction lit Journal entry worksheet Record the entry to correct inventory valuation. Note: Enter debits before credits General Journal Debit Credit Transaction 1 Record entry Clear en View general Journal

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

Ethical Obligations And Decision Making In Accounting Text And Cases

Authors: Steven Mintz, Roselyn Morris

2nd Edition

0078025281, 9780078025280

More Books

Students also viewed these Accounting questions