Question

The inventory ledger account balance on June 30, 2019, was $7,650, and net realisable value for each product line exceeded the cost. The cost of inventory on hand June 30, 2019, was determined by physical count, however, it was only $7,578. In investigating the reasons for the discrepancy, Beyer Ltd discovered the following.

• Goods costing $87 were sold for $110 (GST Inclusive) on June 26, 2019, on FOB destination (seller pays shipping) shipping terms. The goods were in transit on June 30, 2019. The sale was recorded on June 26, 2019, and the goods were not included in the physical count.
• Goods costing $99 (GST Inclusive) were ordered on June 24, 2019, on FOB shipping point shipping terms. The goods were delivered to the transport company on June 27, 2019. The purchase was recorded on June 27, 2019, but, as the goods had not yet arrived, the goods were not included in the physical count.
• Goods costing $140 held on consignment for Richmond Ltd were included in the physical count.

Required

Prepare any journal entries required on June 30, 2019, to correct any errors and to adjust the inventory account. No Post Ref required. Refer to the provided Chart of Accounts for the appropriate account names.

Date	Account	Post Ref	Debit	Credit
26 june 2019
	To record reversal of error in the recording of sales of item on FOB Destination shipping terms
	To record items “sold” back into inventory
	To record inventory lost or missing

Answer 1

Date	Account	Post Ref.	Debit	Credit
30/6/2019	No entry required for FOB Destination FOB destination point
30/6/2019	No entry required for purchases of goods on FOB shipping point
30/6/2019	No entry required for the goods held on consignment as it has been
	included in physical count but accounts appears to be correc
30/6/2019	Cost of Goods Sold expnses A/c---Dr	212.00
	To Inventory A/c		212.00
	(Being COGS recorded for missing inventory)
Working-	Amount ($)
Inventory as per accounts	7,650.00
Less: Inventory in count	(7,578.00)
Add: inventory on consignment but counted	140.00
Missing inventory value	212.00