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Company A uses a periodic inventory system. In 2021, the internal auditors of Company A discovered that goods costing $180,000 that were purchased f.o.b. shipping point in December of 2020 were in transit on December 31. The goods were recorded as a purchase in December of 2020 but were not included in the 2020 year-end inventory. What is the journal entry needed in 2021 to correct the error? O Inventory Retained Earnings 180,000

Company A uses a periodic inventory system. In 2021, the internal auditors of Company A discovered that goods costing $180,000 that were purchased f.o.b. shipping point in December of 2020 were in transit on December 31. The goods were recorded as a purchase in December of 2020 but were not included in the 2020 year-end inventory. What is the journal entry needed in 2021 to correct the error? O Inventory Retained Earnings 180,000

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 17E: Errors A company that uses the periodic inventory system makes the following errors: 1. It omits a...
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Company A uses a periodic inventory system. In 2021, the internal auditors of Company A discovered that goods costing $180,000 that were purchased f.o.b. shipping point in December of 2020 were in transit on December 31. The goods were recorded as a purchase in December of 2020 but were not included in the 2020 year-end inventory. What is the journal entry needed in 2021 to correct the error? Inventory Retained Earnings 180,000
Transcribed Image Text:Company A uses a periodic inventory system. In 2021, the internal auditors of Company A discovered that goods costing $180,000 that were purchased f.o.b. shipping point in December of 2020 were in transit on December 31. The goods were recorded as a purchase in December of 2020 but were not included in the 2020 year-end inventory. What is the journal entry needed in 2021 to correct the error? Inventory Retained Earnings 180,000
O Accounts Payable Cash Company A record its payment on March 19 if it uses the perpetua landise on March 8, 2021 with credit terms of 4 Accounts Payable Cash Purchase Discounts Accounts Payable Cash Accounts Payable Cash Inventory 10,500 10,500 10,080 10,500 10,500 10,080 420 10,080 10,080 420
Transcribed Image Text:O Accounts Payable Cash Company A record its payment on March 19 if it uses the perpetua landise on March 8, 2021 with credit terms of 4 Accounts Payable Cash Purchase Discounts Accounts Payable Cash Accounts Payable Cash Inventory 10,500 10,500 10,080 10,500 10,500 10,080 420 10,080 10,080 420
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