at an interim date, May 31, 2020, instead of at year end.ended June 30, 2020, the CPA observed the physical inventoryIn conducting an audit of Ultimate Company for the yearThe following information was obtained from the generalProblem 13-14 (AICPA Adapted)fortheyearledger.875,000950,0008,400,0009,600,000Inventory, July 1, 2019Physical inventory, May 31, 2020Sales for 11 months ended May 31, 2020Sales for year ended June 30, 2020Purchases for 11 months ended May 31, 2020before audit adjustmentsPurchases for year ended June 30, 2020before audit adjustments6.6,750,0008,000,0001. Shipments' received in May and included in thephysical inventory but recorded as June purchases75,000b. Shipments received in unsalable condition andexcluded from physical inventory. Credit memoshad not been received nor had chargebacks tovendors been recorded:10,000Total at May 31, 2020Total at June 30, 2020, including the Mayunrecorded chargebacks15,000c. Deposit made with vendor and charged to purchasesin April, 2020. Product was shipped in July, 202020,000d. Deposit made with' vendor and charged to purchasesin May, 2020. Product was shipped FOB destination,on May 29, 2020 and was included in May 31, 2020physical inventory as goods in transit55,000e. Through the carelessness of the receiving departmenta June shipment was damaged by rain. This shipmentwas later sold in June at its cost of100,000 1. What is the amount of gross profit for the eleven monthsended May 31, 2020?a. 1,680,000b. 1,725,000с. 1,735,000d. 1,670,000- 2. What is the amount of sales for the month of June?a. 1,100,000b. 1,200,000c. 1,300,000d. 1,400,0003. What is the cost of goods sold for the month of June ?a. 960,000b. 880,000c. 980,000d. 950,0004. What is the inventory on June 30, 2020?a. 1,160,000b. 1,240,000c. 1,340,000d. 1,140,000

Answer: 1) Option A i.e. 1,680,000 2) Option B i.e. 1,200,000 3) Option C i.e. 980,000

before audit adjustments rchases for year ended June 30, 202C before audit adjustments Shipments' received in May and inclu physical inventory but recorded as Ju Shipments received in unsalable cond excluded from physical inventory. Cre had not been received nor had charge vendors been recorded: Total at May 31, 2020 Total at June 30, 2020, including unrecorded chargebacks Deposit made with vendor and charge in April, 2020. Product was shipped in Deposit made with vendor and charge in May, 2020. Product was shipped FC on May 29, 2020 and was included in physical inventory as goods in tuo

before audit adjustments rchases for year ended June 30, 202C before audit adjustments Shipments' received in May and inclu physical inventory but recorded as Ju Shipments received in unsalable cond excluded from physical inventory. Cre had not been received nor had charge vendors been recorded: Total at May 31, 2020 Total at June 30, 2020, including unrecorded chargebacks Deposit made with vendor and charge in April, 2020. Product was shipped in Deposit made with vendor and charge in May, 2020. Product was shipped FC on May 29, 2020 and was included in physical inventory as goods in tuo

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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