You are engaged in an audit of Roche Mfg Company for the year ended December 31, 2019 To reduce the workload at year end, Roche took its annual physical inventory under your observation on November 30, 2019 Roche's inventory account, which includes raw materials and work in process, is on a perpetual basis, and it uses the first in, first out method of pricing It has no finished goods inventory The company's physical inventory revealed that the book inventory of $60,570 was understated by $3,000 To avoid distorting the interim financial statements, Roche decided not to adjust the book inventory until year end except for obsolete inventory items Your audit revealed this information about the November 30 inventory Pricing tests showed that the physical inventory was overpriced by $2,200 Footing and extension errors resulted in a $150 understatement of the physical inventory Direct labor included in the physical inventory amounted to $10,000 Overhead was included at the rate of 200 of direct labor You determined that the amount of direct labor was correct and the overhead rate was proper The physical inventory included obsolete materials recorded at $250 During December, these materials were removed from the inventory account by a charge to cost of sales Your audit also disclosed the following information about the December 31, 2019, inventory Total debits to certain accounts during December are December Purchases $24,700 Direct labor 12,100 Manufacturing overhead expense 25,200 Cost of sales 68,600 The cost of sales of $68,600 included direct labor of $13,800 Normal scrap loss on established product lines is negligible However, a special order started and completed during December had excessive scrap loss of $800 which was charged to Manufacturing Overhead Expense Required Question Content Area 1 Compute the correct amount of the physical inventory at November 30, 2019 Inventory per books $fill in the blank 6ca0ce0c7f88f87 1 Footing and extension errorsObsolete inventoryPricing errorsPurchasesScrap loss on new productUnderstatement per client's computationsPricing errors fill in the blank 6ca0ce0c7f88f87 3 Physical inventory, per client $fill in the blank 6ca0ce0c7f88f87 4 Add Footing and extension errorsAdd PurchasesAdd Understatement per client's computationsLess Footing and extension errorsLess LaborLess Understatement per client's computationsAdd Footing and extension errors fill in the blank 6ca0ce0c7f88f87 6 Total $fill in the blank 6ca0ce0c7f88f87 7 Add Footing and extension errorsAdd Pricing errorsAdd Understatement per client's computationsLess Footing and extension errors Less Pricing errorsLess Understatement per client's computationsLess Pricing errors $fill in the blank 6ca0ce0c7f88f87 9 Add Footing and extension errorsAdd Obsolete inventoryAdd Understatement per client's computationsLess Footing and extension errors Less Obsolete inventoryLess Understatement per client's computationsLess Obsolete inventory fill in the blank 6ca0ce0c7f88f87 11 fill in the blank 6ca0ce0c7f88f87 12 Corrected physical inventory at November 30, 2019 $fill in the blank 6ca0ce0c7f88f87 13 Question Content Area 2 Without prejudice to your solution to Requirement 1, assume that the correct amount of the inventory at November 30, 2019, was $57,700 Compute the amount of the inventory at December 31, 2019 Corrected physical inventory at November 30 $fill in the blank 8204c7fb600106c 1 Add Direct labor includedAdd Materials inventory at December 31Add Obsolete items included in cost of salesAdd PurchasesAdd Scrap loss on new productLess Cost of salesLess Direct labor includedLess Materials inventory at December 31 $ Select Add Materials inventory at December 31Add Obsolete items included in cost of salesAdd Overhead includedAdd PurchasesLess Cost of salesLess Materials inventory at December 31Less Obsolete items included in cost of salesLess Overhead included Select Select Inventory of materials at November 30 $fill in the blank 8204c7fb600106c 7 Add Direct labor in inventoryAdd Materials inventory at December 31Add Obsolete items included in cost of salesAdd PurchasesLess Cost of salesLess Materials inventory at December 31Less Obsolete items included in cost of salesLess Purchases Select Total material available $fill in the blank 8204c7fb600106c 10 Add Direct labor in inventoryAdd Materials inventory at December 31Add Obsolete items included in cost of salesAdd Scrap loss on new productDeduct Cost of salesDeduct Direct labor in inventoryDeduct Materials inventory at December 31Deduct Obsolete items included in cost of sales $ Select Add Direct labor in inventoryAdd Materials inventory at December 31Add Obsolete items included in cost of salesAdd PurchasesLess Direct labor in inventoryLess LaborLess Materials inventory at December 31Less Obsolete items included in cost of sales $ Select Add Direct labor in inventoryAdd Materials inventory at December 31Add Obsolete items included in cost of salesAdd OverheadLess Direct labor in inventoryLess Materials inventory at December 31Less Obsolete items included in cost of salesLess Overhead Select Select Total $fill in the blank 8204c7fb600106c 18 Accounts payableDirect labor in inventoryMaterials inventory at December 31Obsolete items included in cost of salesOverheadPurchansesSalesScrap loss on new product Select Total $fill in the blank 8204c7fb600106c 21 Add Materials inventory at December 31Add Obsolete items included in cost of salesAdd PurchasesLess Direct labor in inventoryLess Materials inventory at December 31Less Obsolete items included in cost of salesLess PurchasesLess Scrap loss on new product Select Select Materials inventory at December 31 $fill in the blank 8204c7fb600106c 25 Add Direct labor in inventoryAdd Obsolete items included in cost of salesAdd OverheadAdd PurchasesLess Cost of salesLess Direct labor in inventoryLess LaborLess Purchases $ Select Add Obsolete items included in cost of salesAdd OverheadAdd PurchasesAdd Scrap loss on new productLess Cost of salesLess Obsolete items included in cost of salesLess OverheadLess Scrap loss on new product Select Select Inventory at December 31, 2019 $fill in the blank 8204c7fb600106c 31

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You are engaged in an audit of Roche Mfg. Company for the year ended December 31, 2019. To reduce the workload at year-end, Roche took

You are engaged in an audit of Roche Mfg. Company for the year ended December 31, 2019. To reduce the workload at year-end, Roche took its annual physical inventory under your observation on November 30, 2019. Roche's inventory account, which includes raw materials and work in process, is on a perpetual basis, and it uses the first-in, first-out method of pricing. It has no finished goods inventory. The company's physical inventory revealed that the book inventory of $60,570 was understated by $3,000. To avoid distorting the interim financial statements, Roche decided not to adjust the book inventory until year-end except for obsolete inventory items. Your audit revealed this information about the November 30 inventory:

Pricing tests showed that the physical inventory was overpriced by $2,200.
Footing and extension errors resulted in a $150 understatement of the physical inventory.
Direct labor included in the physical inventory amounted to $10,000. Overhead was included at the rate of 200% of direct labor. You determined that the amount of direct labor was correct and the overhead rate was proper.
The physical inventory included obsolete materials recorded at $250. During December, these materials were removed from the inventory account by a charge to cost of sales.

Your audit also disclosed the following information about the December 31, 2019, inventory.

Total debits to certain accounts during December are:

	December
Purchases	$24,700
Direct labor	12,100
Manufacturing overhead expense	25,200
Cost of sales	68,600

The cost of sales of $68,600 included direct labor of $13,800.
Normal scrap loss on established product lines is negligible. However, a special order started and completed during December had excessive scrap loss of $800 which was charged to Manufacturing Overhead Expense.

Required:

Question Content Area

1. Compute the correct amount of the physical inventory at November 30, 2019.

Inventory per books		$fill in the blank 6ca0ce0c7f88f87_1
Footing and extension errorsObsolete inventoryPricing errorsPurchasesScrap loss on new productUnderstatement per client's computationsPricing errors		fill in the blank 6ca0ce0c7f88f87_3
Physical inventory, per client		$fill in the blank 6ca0ce0c7f88f87_4
Add: Footing and extension errorsAdd: PurchasesAdd: Understatement per client's computationsLess: Footing and extension errorsLess: LaborLess: Understatement per client's computationsAdd: Footing and extension errors		fill in the blank 6ca0ce0c7f88f87_6
Total		$fill in the blank 6ca0ce0c7f88f87_7
Add: Footing and extension errorsAdd: Pricing errorsAdd: Understatement per client's computationsLess: Footing and extension errors Less: Pricing errorsLess: Understatement per client's computationsLess: Pricing errors	$fill in the blank 6ca0ce0c7f88f87_9
Add: Footing and extension errorsAdd: Obsolete inventoryAdd: Understatement per client's computationsLess: Footing and extension errors Less: Obsolete inventoryLess: Understatement per client's computationsLess: Obsolete inventory	fill in the blank 6ca0ce0c7f88f87_11	fill in the blank 6ca0ce0c7f88f87_12
Corrected physical inventory at November 30, 2019		$fill in the blank 6ca0ce0c7f88f87_13

Question Content Area

2. Without prejudice to your solution to Requirement 1, assume that the correct amount of the inventory at November 30, 2019, was $57,700. Compute the amount of the inventory at December 31, 2019.

Corrected physical inventory at November 30			$fill in the blank 8204c7fb600106c_1
Add: Direct labor includedAdd: Materials inventory at December 31Add: Obsolete items included in cost of salesAdd: PurchasesAdd: Scrap loss on new productLess: Cost of salesLess: Direct labor includedLess: Materials inventory at December 31		$- Select -
Add: Materials inventory at December 31Add: Obsolete items included in cost of salesAdd: Overhead includedAdd: PurchasesLess: Cost of salesLess: Materials inventory at December 31Less: Obsolete items included in cost of salesLess: Overhead included		- Select -	- Select -
Inventory of materials at November 30			$fill in the blank 8204c7fb600106c_7
Add: Direct labor in inventoryAdd: Materials inventory at December 31Add: Obsolete items included in cost of salesAdd: PurchasesLess: Cost of salesLess: Materials inventory at December 31Less: Obsolete items included in cost of salesLess: Purchases			- Select -
Total material available			$fill in the blank 8204c7fb600106c_10
Add: Direct labor in inventoryAdd: Materials inventory at December 31Add: Obsolete items included in cost of salesAdd: Scrap loss on new productDeduct: Cost of salesDeduct: Direct labor in inventoryDeduct: Materials inventory at December 31Deduct: Obsolete items included in cost of sales		$- Select -
Add: Direct labor in inventoryAdd: Materials inventory at December 31Add: Obsolete items included in cost of salesAdd: PurchasesLess: Direct labor in inventoryLess: LaborLess: Materials inventory at December 31Less: Obsolete items included in cost of sales	$- Select -
Add: Direct labor in inventoryAdd: Materials inventory at December 31Add: Obsolete items included in cost of salesAdd: OverheadLess: Direct labor in inventoryLess: Materials inventory at December 31Less: Obsolete items included in cost of salesLess: Overhead	- Select -	- Select -
Total		$fill in the blank 8204c7fb600106c_18
Accounts payableDirect labor in inventoryMaterials inventory at December 31Obsolete items included in cost of salesOverheadPurchansesSalesScrap loss on new product		- Select -
Total		$fill in the blank 8204c7fb600106c_21
Add: Materials inventory at December 31Add: Obsolete items included in cost of salesAdd: PurchasesLess: Direct labor in inventoryLess: Materials inventory at December 31Less: Obsolete items included in cost of salesLess: PurchasesLess: Scrap loss on new product		- Select -	- Select -
Materials inventory at December 31			$fill in the blank 8204c7fb600106c_25
Add: Direct labor in inventoryAdd: Obsolete items included in cost of salesAdd: OverheadAdd: PurchasesLess: Cost of salesLess: Direct labor in inventoryLess: LaborLess: Purchases		$- Select -
Add: Obsolete items included in cost of salesAdd: OverheadAdd: PurchasesAdd: Scrap loss on new productLess: Cost of salesLess: Obsolete items included in cost of salesLess: OverheadLess: Scrap loss on new product		- Select -	- Select -
Inventory at December 31, 2019			$fill in the blank 8204c7fb600106c_31