The unadjusted inventory balance of Conway Corp. is $800,000 on December 31, based on a physicalinventory count. Several items must be considered before the inventory valuation is finalized.1. On December 31, the physical inventory excluded $10,000 of merchandise inventory shipped f.o.b.destination to Conway Corp. from a vendor. The inventory arrived on January 5 of the following year.2. On December 31, the physical inventory included $1,500 of merchandise held on consignment. Theconsignor is PackagingPlus Inc.3. $75,000 of in-transit merchandise was shipped f.o.b. shipping point to a customer and was excludedfrom the physical inventory count. The merchandise was shipped on December 28 and is expected toarrive at the customer's site on December 31.4. On December 31, the physical inventory excluded $25,000 of merchandise inventory held onconsignment by a customer. Conway Corp. is the consignor.5. Goods are in transit from a vendor to Conway Corp. on December 31. The invoice cost was $40,000 andthe goods were shipped f.o.b. shipping point on December 26. The merchandise was excluded from thephysical inventory count because the merchandise had not been received.6. Merchandise with a cost of $30,000 is held in the receiving department for return, but Conway stillcontrols this inventory. The merchandise was excluded from the physical inventory count.RequiredCalculate the adjusted inventory balance on December 31.$ 845,000

Inventory is bought by the company which is further sold to customers to generate revenue. The cost…

4. On December 31, the physical inventory excluded $25,000 of merchandise inventory held on consignment by a customer. Conway Corp. is the consignor. 5. Goods are in transit from a vendor to Conway Corp. on December 31. The invoice cost was $40,000 and the goods were shipped f.o.b. shipping point on December 26. The merchandise was excluded from the physical inventory count because the merchandise had not been received. 6. Merchandise with a cost of $30,000 is held in the receiving department for return, but Conway still controls this inventory. The merchandise was excluded from the physical inventory count. Required Calculate the adjusted inventory balance on December 31. $ 845,000

4. On December 31, the physical inventory excluded $25,000 of merchandise inventory held on consignment by a customer. Conway Corp. is the consignor. 5. Goods are in transit from a vendor to Conway Corp. on December 31. The invoice cost was $40,000 and the goods were shipped f.o.b. shipping point on December 26. The merchandise was excluded from the physical inventory count because the merchandise had not been received. 6. Merchandise with a cost of $30,000 is held in the receiving department for return, but Conway still controls this inventory. The merchandise was excluded from the physical inventory count. Required Calculate the adjusted inventory balance on December 31. $ 845,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following merchandise transactions occurred in December. Both cormpanies use a perpetual inventory systerm.Dec.3.Wildhorse Company sold merchandise to Blossom Co. for $40,000, terms 2/10, n/30, FOB destination. This merchandisecost Wildhorse Company $18,000.4The correct company paid freight charges of $800.8Blossom Co. returned unwanted merchandise to Wildhorse. The returned merchandise had a sale price of $2,500 and acost of $990. It was restored to inventory.13Wildhorse Company received the balance due from Blossom Co. Assuming that Blossorm Co. had a balance in Merchandise Inventory on Decerber 1 of $6,000, determine the balance in theMerchandise Inventory account at the end of Decermber for Blossormn Co.
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On June 10, Blue Spruce Company purchased $8,400 of merchandise on account from Ayayai Company, FOB shipping point, terms 3/10, n/30. Blue Spruce pays the freight costs of $460 on June 11. Goods totaling $700 are returned to Ayayai for credit on June 12. On June 19, Blue Spruce pays Ayayai Company in full, less the discount. Both companies use a perpetual inventory system.
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12. Boston Dollar Store uses the gross method to record purchase discounts and uses a perpetual inventory system. Boston engaged in the following transactions during April:April 12 - Purchased $15,000 in merchandise subject to terms of 2/10, n/30. The goods were shipped f.o.b. shipping point.April 13 - Received a billing from Orange Freight Lines for $300 for the April 12 purchase.April 15 - Returned $1,000 of merchandise from the April 12 purchase.April 20 - Paid balances due from April 12 purchase.Required:Prepare journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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