7-5. End-of-period adjustments. boi వెంచం Local Hardware uses the periodic inventory method. At the end of the accounting period, the company takes a physical inventory and finds that $20,671 of goods are on hand. Purchases during the period were $76,216, and inventory at the beginning of the period was $25,632. Freight on merchandise coming into the business was $2,799, and returns of merchandise to suppliers amounted to $1,776. In the schedule below, record the journal entry to be made by Local at the end of the accounting period to close the old inventory and record the new one. 7-6. End-of-period adjustments. ba3 Gnu Company uses the perpetual method of recording inventory. Its records show the Inventory account balance of $15,889. A count of the inventory, however, finds only $14,278 of inventory on hand. Record the entry needed by Gnu to correct its records. Assume that inventory differences of more than 5% of the cost of inventory on hand will have a significant impact on the income statement amounts. Provide Gnu with at least three reasons for the difference in recorded and physical inventory amounts.
7-5. End-of-period adjustments. boi వెంచం Local Hardware uses the periodic inventory method. At the end of the accounting period, the company takes a physical inventory and finds that $20,671 of goods are on hand. Purchases during the period were $76,216, and inventory at the beginning of the period was $25,632. Freight on merchandise coming into the business was $2,799, and returns of merchandise to suppliers amounted to $1,776. In the schedule below, record the journal entry to be made by Local at the end of the accounting period to close the old inventory and record the new one. 7-6. End-of-period adjustments. ba3 Gnu Company uses the perpetual method of recording inventory. Its records show the Inventory account balance of $15,889. A count of the inventory, however, finds only $14,278 of inventory on hand. Record the entry needed by Gnu to correct its records. Assume that inventory differences of more than 5% of the cost of inventory on hand will have a significant impact on the income statement amounts. Provide Gnu with at least three reasons for the difference in recorded and physical inventory amounts.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:7-5. End-of-period adjustments.
boi
వెంచం
Local Hardware uses the periodic inventory method. At the end of the accounting period, the
company takes a physical inventory and finds that $20,671 of goods are on hand. Purchases
during the period were $76,216, and inventory at the beginning of the period was $25,632.
Freight on merchandise coming into the business was $2,799, and returns of merchandise to
suppliers amounted to $1,776. In the schedule below, record the journal entry to be made by
Local at the end of the accounting period to close the old inventory and record the new one.
7-6. End-of-period adjustments.
ba3
Gnu Company uses the perpetual method of recording inventory. Its records show the Inventory
account balance of $15,889. A count of the inventory, however, finds only $14,278 of inventory
on hand. Record the entry needed by Gnu to correct its records. Assume that inventory
differences of more than 5% of the cost of inventory on hand will have a significant impact on
the income statement amounts.
Provide Gnu with at least three reasons for the difference in recorded and physical inventory
amounts.
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