Question

Grouper Corporation asks you to review its December 31, 2017 inventory values and prepare the necessary adjustments to the books. The following information is given to you:

B) Prepare any adjusting/correcting entries necessary at December 31, 2017. Assume the books have not been closed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account title and explanation Debit Credit
1-

2-

3-

4-

5-

6-

7-

8-

9-

1.		Grouper uses the periodic method of recording inventory. A physical count reveals $234,400 of inventory on hand at December 31, 2017, although the books have not yet been adjusted to reflect the ending inventory.
2.		Not included in the physical count of inventory is $10,400 of merchandise purchased on December 15 from Shamsi. This merchandise was shipped f.o.b. shipping point on December 29 and arrived in January. The invoice arrived and was recorded on December 31.
3.		Included in inventory is merchandise sold to Sage on December 30, f.o.b. destination. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale on account for $12,200 on December 31. The merchandise cost $7,370, and Sage received it on January 3.
4.		Included in the count of inventory was merchandise received from Dutton on December 31 with an invoice price of $15,500. The merchandise was shipped f.o.b. destination. The invoice, which has not yet arrived, has not been recorded.
5.		Not included in inventory is $8,700 of merchandise purchased from Growler Industries. This merchandise was received on December 31, after the inventory had been counted. The invoice was received and recorded on December 30.
6.		Included in inventory was $10,200 of inventory held by Grouper on consignment from Jackel Industries.
7.		Included in inventory is merchandise sold to Kemp, f.o.b. shipping point. This merchandise was shipped after it was counted, on December 31. The invoice was prepared and recorded as a sale for $18,600 on December 31. The cost of this merchandise was $11,600, and Kemp received the merchandise on January 5.
8.		Excluded from inventory was a carton labelled "Please accept for credit." This carton contained merchandise costing $1,600, which had been sold to a customer for $2,600. No entry had been made to the books to record the return, but none of the returned merchandise seemed damaged.
9.		Grouper sold $13,000 of inventory to Simply Corp. on December 15, 2017. These items were shipped f.o.b. shipping point. The terms of sale indicate that Simply Corp. will be permitted to return an unlimited amount until May 15, 2018. Grouper has never provided unlimited returns in the past and is not able to estimate the amount of any potential returns that Simply may make.

A) Determine the proper inventory balance for Grouper Corporation at December 31, 2017.

Inventory Balance $___________

Answer 1

Answer a.
Inventory Dec 31, 2017 - Unadjusted	234,400.00
Transaction 2	10,400.00
Transaction 3	-
Transaction 4	-
Transaction 5	8,700.00
Transaction 6	(10,200.00)
Transaction 7	(11,600.00)
Transaction 8	1,600.00
Transaction 9	-
Inventory, Dec 31, 2017 - Adjusted	233,300.00

Answer b.
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
Trans 3.	Sales Revenue	12,200.00
	Accounts Receivable		12,200.00
	(To reverse the sales made to Shamsi)
Trans 4.	Inventory	15,500.00
	Accounts Payable		15,500.00
	(To record the purchase made)
Trans 8.	Sales return & Allowances	2,600.00
	Accounts Receivable		2,600.00
	(record the sales return)