Question

In: Accounting

The inventory ledger account balance on June 30, 2019, was $15,300, and net realisable value for...

The inventory ledger account balance on June 30, 2019, was $15,300, and net realisable value for each product line exceeded the cost. The cost of inventory on hand June 30, 2019, determined by physical count, however, was only $15,156. In investigating the reasons for the discrepancy, Boodja-Dooga Ltd discovered the following.

  • Goods costing $174 were sold for $220 (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 $198 (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 $280 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.

Date

Account

Post Ref

Debit

Credit

2019

To record reversal of error in recording of sales of item on FOB Destination shipping terms

To record items “sold” back into inventory

To record inventory lost or missing

Solutions

Expert Solution

Solution:

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

The inventory ledger account balance on June 30, 2019, was $7,650, and net realisable value for...
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...
The cash account of Concord Corporation shows a ledger balance of $3,968.70 on June 30, 2020....
The cash account of Concord Corporation shows a ledger balance of $3,968.70 on June 30, 2020. The bank statement as at that date shows a balance of $4,128. When the statement was compared with the cash records, the following facts were determined: 1. There were bank service charges for June of $30. 2. A bank memo stated that a note from Bao Dai for $880 and interest of $34 had been collected on June 29, and the bank had made...
Riverbed Spa shows a general ledger balance for the Cash account of $5,227.95 on June 30...
Riverbed Spa shows a general ledger balance for the Cash account of $5,227.95 on June 30 and the bank statement as of that date indicates a balance of $4,450.00. When the statement was compared with the cash records, the following facts were determined: 1. There were bank service charges for June of $34.00. 2. A bank memo stated that Bao Dai’s note for $900 and interest of $46.00 had been collected on June 29, and the bank had charged $6.30...
Novak Spa shows a general ledger balance for the Cash account of $3,974.35 on June 30...
Novak Spa shows a general ledger balance for the Cash account of $3,974.35 on June 30 and the bank statement as of that date indicates a balance of $4,145.00. When the statement was compared with the cash records, the following facts were determined: 1. There were bank service charges for June of $33.00. 2. A bank memo stated that Bao Dai’s note for $897.00 and interest of $42.00 had been collected on June 29, and the bank had charged $7.50...
When should income be recognised? In the context of inventory valuation, what is Net Realisable Value,...
When should income be recognised? In the context of inventory valuation, what is Net Realisable Value, when might it be used and why?
The information relates to the Cash Account in the ledger of Covid Company : Balance June...
The information relates to the Cash Account in the ledger of Covid Company : Balance June 1 $7,150 ; cash deposited $64,000; Balance June 30 $17,404 ; checks written $63,746. The June bank statement shows a balance of $16,122 on June 30. The following are memoranda from bank : Collection of $1,500 note plus interest $30; Interest earned on checking account $45; NSF check from Violet Jones $725; Safety deposit box rent $65. At June 30, deposits in transit were...
Account June 30 2020 June 30 2019 $ $ Cash and cash equivalents 95,800 64,000 Debtors...
Account June 30 2020 June 30 2019 $ $ Cash and cash equivalents 95,800 64,000 Debtors 231,600 157,200 Inventory 96,720 104,400 Plant and equipment 100,000 75,000 Accumulated depreciation – plant and equipment (40,000) (29,000) Total assets 484 120 371,600 Creditors 71,000 74,400 Accrued expenses 30,000 33,000 Long-term loan 100,000 50,000 Capital and reserves 283,120 214,200 Total liabilities and owners equity 484 120 371,600 Sales 440,000 Less: Cost of goods sold 296,000 Gross profit 144,000 Operating expenses (including depreciation) 84,000 Net...
Bentley Company’s June 30 bank statement and June ledger account for cash are summarized below: BANK...
Bentley Company’s June 30 bank statement and June ledger account for cash are summarized below: BANK STATEMENT Checks Deposits Balance Balance, June 1 $ 7,450 Deposits during June $ 15,800 23,250 Checks cleared during June $ 16,550 6,700 Bank service charges 22 6,678 Balance, June 30 6,678 Cash (A) June 1 Balance 7,450 June Checks written 19,100 June Deposits 18,450 Required: 1. Reconcile the bank account. A comparison of the checks written with the checks that have cleared the bank...
Bentley Company’s June 30 bank statement and June ledger account for cash are summarized below: BANK...
Bentley Company’s June 30 bank statement and June ledger account for cash are summarized below: BANK STATEMENT Checks Deposits Balance Balance, June 1 $ 6,500 Deposits during June $ 16,200 22,700 Checks cleared during June $ 16,600 6,100 Bank service charges 40 6,060 Balance, June 30 6,060 Cash (A) June 1 Balance 6,500   June Checks written 19,000 June Deposits 18,100 Required: 1. Reconcile the bank account. A comparison of the checks written with the checks that have cleared the bank...
Prepare adjusting entries. A review of the ledger of Monkey Ltd at 30 June 2019 produced...
Prepare adjusting entries. A review of the ledger of Monkey Ltd at 30 June 2019 produced the following data relating to the preparation of annual adjusting entries: 1. Prepaid insurance $37260: the entity has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on 1 January 2018 for $33300. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on 1 July 2018 for $9510. This policy...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT