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VIEW BOTH IMAGES - - RED MARKS ARE WRONG AND NEED TO BE FIXED. Problem 8 - 3 ( Algo ) Costs included in inventory
VIEW BOTH IMAGES RED MARKS ARE WRONG AND NEED TO BE FIXED. Problem Algo Costs included in inventory LO Required:
Complete the following schedule of adjustments to the initial amounts.
Note: Amounts to be deducted should be indicated with a minus sign.
Answer is not complete.
tableInventory,tableAccountsPayabletableSales$Initial amounts,$$Adjustmentsincrease decrease:times times times times times times times times Total adjustments,,Adjusted amounts,$$$
Rachet Corporation is a wholesale distributor of truck replacement parts. Initial amounts taken from Rachet's records are as follows:
Inventory at December based on a physical count
of goods in Rachet's warehouse on December $
Accounts payable at December :
Additional Information:
Parts held by Rachet on consignment from Crates, amounting to $ were included in the physical count of goods in
Rachet's warehouse and in accounts payable at December
Parts totaling $ which were purchased from Freight and paid for in December, were sold in the last week of the year and
appropriately recorded as sales of $ The parts were included in the physical count of goods in Rachet's warehouse on
December because the parts were on the loading dock waiting to be picked up by customers.
Parts in transit on December to customers, shipped fob shipping point on December amounted to $ The
customers received the parts on January of the following year. Sales of $ to the customers for the parts were recorded
by Rachet on January
Retailers were holding goods on consignment from Rachet, which had a cost of $ and a retail value of $
Goods were in transit from Gears to Rachet on December The cost of the goods was $ and they were shipped fob
shipping point on December
A freight bill in the amount of $ specifically relating to inventory purchased in December, all of which was still in the
inventory at December was received on January The freight bill was not included in either the inventory or in accounts
payable at December
All the purchases from Boxes occurred during the last seven days of the year. These items have been recorded in accounts
payable and accounted for in the physical inventory at cost before discount. Rachet's policy is to pay invoices in time to take
advantage of all discounts, adjust inventory accordingly, and record accounts payable net of discounts.
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