esYou have been assigned to select an MUS sample from Whitney Company's detailed inventory records as of September 30. Whitney'scontroller gave you a list of the 23 different inventory items and their recorded book amounts. The senior accountant told you to selecta sample of 10 dollar units and the inventory items that contain them.IDAmountIDAmountIDAmountIDAmount1$1,7507$1,25513$ 93719$2,57721,49283,761145,938201,126399491,956152,001215654629101,39316222222,319562,2721,16311884171,738231,68112729181,228Required:Prepare audit documentation showing a systematic selection of 10 dollar units and the related logical units. Arrange the items in theirnumerical identification number order and use a random starting point at the 1,210th dollar.RecordedIDAmountCumulativeAmount1$ 1,750DollarSelected1,210SelectedLogical Unit21,4923994462952,27261,16371,25583,76191,956101,393118841272913937145,938152,00116222171,738181,228

The first step is to determine the sampling interval.Sample Size = 10 units The sampling interval =…

Answered: es You have been assigned to select an…

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 4PB: The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are...

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Your audit client presented the following information on December 31, 2018: Net purchases (all on account) — P2,400,000; Inventory, December 31, 2018 — P350,000. The audited balance of inventory on December 31, 2017 is P260,000. Additional information:A. The December 31, 2018 inventory balance is based on the inventory count conducted on the entity's warehouse. All inventories in the warehouse at that date were included, while inventories not in the warehouse were not included in the count. B. A purchase of inventory for P6,000 was recorded on December 28, 2018 and the goods are still in transit as of December 31. The related freight term is FOB Shipping Point. C. Goods (costing P20,000) consigned by your client to another entity are not yet sold as of December 31, 2018. No journal entry was prepared by your client upon the transfer of goods to the consignee. D. Goods costing P8,000 were sold for P15,000 on December 28, 2018. The freight term is FOB Shipping Point.E. A purchase of…
Tracing the Inventory Count. You have been assigned to trace the results of the observation of Brightware China’s physical inventory count to its pricing and compilation. You note the following conditions.1. The last inventory tag documented by Mark Hulse, the auditor who observed the inventory, was 1732, but you notice a number of items with count ticket numbers higher than 1732. You contact the client’s controller, Marcia Vines, who tells you the client found a storage room full of a new product that Brightware had just produced and added it to the inventory. 2. The count tickets recorded by Hulse agree to the inventory list, but some of the other count tickets you select are substantially different from it. Vines tells you these are input errors and she will have them corrected. 3. Hulse described several boxes of goods as being dusty and even broken. They are included in the inventory at cost. Vines’s explanation is that china never “goes bad” and the goods themselves were not…
In your audit of Thomas Taylor Company, you find that a physical inventory on December 31, 2025, showed merchandise with a cost of $403,730 was on hand at that date. You also discover the following items were all excluded from the $403,730. 1. 2. 3. 4. 5. Merchandise of $61,080 which is held by Taylor on consignment. The consignor is the Max Suzuki Company. Merchandise costing $35,400 which was shipped by Taylor f.o.b. destination to a customer on December 31, 2025. The customer was expected to receive the merchandise on January 6, 2026. Merchandise costing $43,270 which was shipped by Taylor f.o.b. shipping point to a customer on December 29, 2025. The customer was scheduled to receive the merchandise on January 2, 2026. Merchandise costing $84,630 shipped by a vendor f.o.b. destination on December 30, 2025, and received by Taylor on January 4, 2026. Merchandise costing $47,400 shipped by a vendor f.o.b. shipping point on December 31, 2025, and received by Taylor on January 5, 2026.…
The followings are 6 audit procedures that were performed in an audit of inventory. Compare the quantities on hand and unit prices on this year’s inventory count sheets with those in the preceding year as a test for large differences. Trail selected quantities from the inventory list to the physical inventory to make sure that it exists, and the quantities are the same. Test the extension of unit prices times quantity on the inventory list for a sample of inventory items, test foot the list, and compare the total to the general ledger. Send letters directly to third parties who hold the client’s inventory, and request that they respond directly to the auditors. Interview the operating personnel regarding the possibility of obsolete or slow-moving inventory. Examine sales invoices and contracts with customers to determine whether any goods are out on consignment with customers. Similarly, examine vendors’ invoices and contracts with vendors to determine whether any goods on the…
Use the information provided in the exhibits to calculate the inventory amounts as they should be reported in the financial statements prepared under U.S. GAAP and IFRS. Enter the appropriate amounts in the associated cells. Enter all amounts as positive values. Round all amounts to the nearest whole number. The following data pertain to Company A’s inventory that was purchased on January 5, Year 1, for $40,000: March 31, Year 1 June 30, Year 1 December 31, Year 1 Estimated selling price $42,000 $44,000 $41,000 Cost of disposal 2,000 2,000 2,500 Normal profit margin 1,200 1,400 1,100 Cost of completion 1,000 1,000 1,000 Current replacement cost 38,000 42,000 36,000 Note: Entire inventory was sold on May 1, Year 2. Company Seeks to Go Global Company A is a publicly traded company that reports interim financial statements on a quarterly basis. Until recently, that is all that Company A has…
SHOW COMPUTATIONyou found the following information relating to certain inventory transactions from your observation of the client’s physical count and review of sales and purchases cutoff: a. Goods costing P180,000 were received from a vendor on January 3, 2021. The goods were not included in the physical count. The related invoice was received and recorded on December 30, 2020. The goods were shipped on December 31, 2020, terms FOB shipping point.b. Goods costing P200,000, sold for P300,000, were shipped on December 31, 2020, and were received by the customer on January 2, 2021. The terms of the invoice were FOB shipping point. The goods were included in the ending inventory for 2020 and the sale was recorded in 2021.c. The invoice for goods costing P150,000 was received and recorded as a purchase on December 31, 2020. The related goods shipped FOB destination were received on January 2, 2021 but were included in the physical inventory as goods in transit.d. A P600,000 shipment of…
Your client, Mang Kanor Corporation, conducted an early inventory count in its warehouse on December 29, 2018 and prepared a schedule of cost of goods sold as follows: Mang Kanor Corporation Schedule of Cost of Goods Sold For the period ended December 31, 2018 Beginning Inventory 546,500 Net purchases 4,900,000 Total Goods available for sale 5,446,500 Less: Ending Inventory per count 600,500 Cost of Goods sold 4,846,000 Audit Notes: Goods costing 54,000 were received on December 30,2018. The related invoice with term FOB Destination was recorded on December 29, 2018. Goods out on consignment to Sellers Company, P120,000…
In your audit of James Smith Company, you find that a physical inventory on December 31, 2020, showed merchandise with a cost of $449,390 was on hand at that date. You also discover the following items were all excluded from the $449,390. 1. 2. 3. 4. 5. Merchandise of $61,150 which is held by Smith on consignment. The consignor is the Max Suzuki Company. Merchandise costing $36,420 which was shipped by Smith f.o.b. destination to a customer on December 31, 2020. The customer was expected to receive the merchandise on January 6, 2021. Merchandise costing $47,720 which was shipped by Smith f.o.b. shipping point to a customer on December 29, 2020. The customer was scheduled to receive the merchandise on January 2, 2021. Merchandise costing $83,030 shipped by a vendor f.o.b. destination on December 30, 2020, and received by Smith on January 4, 2021. Merchandise costing $49,200 shipped by a vendor f.o.b. shipping point on December 31, 2020, and received by Smith on January 5, 2021. Based on…
PROBLEM: Sharp Company received P 80,000 of inventory items on the last day of its fiscal year, May 31, 2022. The company employees a periodic inventory system. During your audit, you discovered the following: Items Alpha were included in inventory at May 31, 2022, but the purchase was not recorded until June 3, 2022, P 100,000. Items Bravo were excluded from the May 31, 2022 inventory, but the purchase was recorded on May 31, 2022, P 60,000. Items Charlie were excluded from the May 31, 2022 inventory, the purchase was not recorded until June 3, 2022, P 50,000. QUESTION: What is the net effect on net income of the errors?
You were engaged in the audit of Pelton Company as of December 31, 2021. The company is on a physical inventory basis. The physical inventory was actually taken on December 28, 2021. You have observed the taking of the physical inventory. As taken, the physical inventory only included only merchandise received through December 28, 2021. The following list of invoices is for purchases of merchandise and are entered in the purchase journal during the last few days of 2021 and the first few days of year 2022: DECEMBER 2021 Receiving Report No. 24201 Freight terms Destination Date of shipment December 23, 2021 December 24, 2021 December 24, 2021 December 24, 2021 December 26, 2021 December 26, 2021 December 26, 2021 January 3, 2022 Date of goods receipt December 26, 2021 December 30, 2021 December 31, 2021 December 29, 2021 January 3, 2022 December 31, 2021 January 4, 2022 January 4, 2022 Amount P35,000 16,000 13,200 28,000 26,100 19,200 14,300 15,920 Shipping point Shipping point…
PLEASE ANSWER ASAP Problem No. 6 In conducting your audit of AACA Corporation, a company engaged in import and wholesale business, for the year ended December 31, 2022, you determined that its internal control system was good. Accordingly, you observed the physical inventory at an interim date, November 30, 2022 instead of at December 31, 2022. You obtained the following information from the company’s general ledger. Sales for eleven months ended November 30, 2022 P1,120,000 Sales for the year ended December 31, 2022 1,536,000 Purchases for eleven months ended November 30, 2022 (before audit adjustments) 856,000 Purchases for the year ended December 31, 2022 1,280,000 Inventory, January 1, 2022 140,000 Physical inventory, November 30, 2022 220,000 Your audit disclosed the following additional information. Shipments costing P12,000 were received in November and included in the physical inventory but recorded as December purchases. Deposit of…
Reggie Company has just completed a physical inventory count at year-end, December 31, 2020. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to $65,000. During the audit, the auditor developed the following additional information: a. Goods costing $750 were being used by a customer on a trial basis and were excluded from the inventory count at December 31, 2020. b. Goods costing $900 were in transit to Reggie on December 31, 2020, with terms F.O.B. destination (explained below). Because these goods had not arrived, they were excluded from the physical inventory count. c. On December 31, 2020, goods in transit to customers, with terms F.O.B. shipping point, amounted to $1,300 (the expected delivery date was January 10, 2021), Because the goods had been shipped, they were excluded from the physical inventory count. d. On December 28, 2020, a customer purchased goods for $2,650 cash and left them "for…

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