Yakima Sporting Goods reported the following information as of December 31, 1996: (Including goods in transit and consignments in ending inventory) Inventory (based on a physical count on 12/31/96) $2,345,000 Accounts payable 778,000 ADDITIONAL INFORMATION: 1. Yakima Sporting Goods had ordered $80,000 of merchandise from its suppliers on December 27, 1996, with the terms FOB destination. The goods were shipped on December 31, 1996, and received on January 2, 1997. 2. Included in the physical inventory count was $35,000 in merchandise held on consignment for Power Sunblock Company. 3. Yakima Sporting Goods received a freight bill for items purchased during December 1996 in the amount of $15,000 on January 6, 1997. These freight charges had not been included in either Inventory or Accounts Payable as of December 31, 1996. Two-thirds of the mer¬ chandise purchased during December 1996 was still in the inventory as of December 31, 1996. 4. Yakima Sporting Goods shipped a large order to an out-of-city customer in the amount of $95,000 (at retail) on December 30, with the terms FOB destination. The customer received the goods on January 2, 1997. Cost of goods sold is 80 percent of the retail price. 5. Yakima Sporting Goods received a shipment from a vendor on December 30, 1996, which was included in the physical inventory count. The vendor invoice of $20,000 was not included in Accounts Payable as of December 31, 1996, due to a temporary breakdown in the company’s internal controls. 6. Yakima Sporting Goods had $50,000 of weightlifting equipment on consignment at a local health club as of December 31, 1996. The equipment was not included in the company’s physical inventory count. REQUIRED:

a. Prepare a schedule in the following format. Inventory Accounts Payable Reported dollar amounts $2,345,000 $778,000 Adjustments 1. 2. 3. 4. 5. 6. _ _ Adjusted dollar amounts ' _ ————-

b. Complete the schedule for each item listed above. If the item requires no adjustment, state “No effect.”