Farley Bains, an auditor with Nolls CPAS, is performing a review of Teal Mountain Inc.'s Inventory account. Teal Mountain Inc. did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $808,200. However, the following information was not considered when determining that amount. Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesis e.g. -45 or parentheses e.g. (45).) 808,200 Ending inventory-as reported $4 1. Included in the company's count were goods with a cost of $224,170 that the company is holding on consignment. The goods belong to Nader Corporation. (224,170) 2. The physical count did not include goods purchased by Teal Mountain Inc. with a cost of $38,530 that were shipped FOB shipping point on December 28 and did not arrive at Teal Mountain Inc.'s warehouse until January 3. 38,530 3. Included in the Inventory account was $18,300 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. (18,300) 4. The company received an order on December 29 that was boxed and was sitting on the loading dock awaiting pick-up on December 31. The shipper picked up the goods on January 1 and delivered them on January 6. The shipping terms were FOB shipping point. The goods had a selling price of $37,470 and a cost of $30,800. The goods were not included in the count because they were sitting on the dock. 30,800 5. Included in the count was $46,300 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Teal Mountain Inc.'s products, it was unlikely that these obsolete parts had any other use. However, management would prefer to keep them on the books at cost, "since that is what we paid for them, after all." 46,300 588,760 Correct inventory
Farley Bains, an auditor with Nolls CPAS, is performing a review of Teal Mountain Inc.'s Inventory account. Teal Mountain Inc. did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $808,200. However, the following information was not considered when determining that amount. Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesis e.g. -45 or parentheses e.g. (45).) 808,200 Ending inventory-as reported $4 1. Included in the company's count were goods with a cost of $224,170 that the company is holding on consignment. The goods belong to Nader Corporation. (224,170) 2. The physical count did not include goods purchased by Teal Mountain Inc. with a cost of $38,530 that were shipped FOB shipping point on December 28 and did not arrive at Teal Mountain Inc.'s warehouse until January 3. 38,530 3. Included in the Inventory account was $18,300 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. (18,300) 4. The company received an order on December 29 that was boxed and was sitting on the loading dock awaiting pick-up on December 31. The shipper picked up the goods on January 1 and delivered them on January 6. The shipping terms were FOB shipping point. The goods had a selling price of $37,470 and a cost of $30,800. The goods were not included in the count because they were sitting on the dock. 30,800 5. Included in the count was $46,300 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Teal Mountain Inc.'s products, it was unlikely that these obsolete parts had any other use. However, management would prefer to keep them on the books at cost, "since that is what we paid for them, after all." 46,300 588,760 Correct inventory
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Farley Bains, an auditor with Nolls CPAS, is performing a review of Teal Mountain Inc.'s Inventory account. Teal Mountain Inc. did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory
balance at year-end was $808,200. However, the following information was not considered when determining that amount.
Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesis e.g. -45 or parentheses e.g. (45).)
808,200
Ending inventory-as reported
$4
1. Included in the company's count were goods with a cost of $224,170 that the company is
holding on consignment. The goods belong to Nader Corporation.
(224,170)
2. The physical count did not include goods purchased by Teal Mountain Inc. with a cost of
$38,530 that were shipped FOB shipping point on December 28 and did not arrive at Teal
Mountain Inc.'s warehouse until January 3.
38,530
3. Included in the Inventory account was $18,300 of office supplies that were stored in the
warehouse and were to be used by the company's supervisors and managers during the
coming year.
(18,300)
4. The company received an order on December 29 that was boxed and was sitting on the
loading dock awaiting pick-up on December 31. The shipper picked up the goods on
January 1 and delivered them on January 6. The shipping terms were FOB shipping point.
The goods had a selling price of $37,470 and a cost of $30,800. The goods were not
included in the count because they were sitting on the dock.
30,800
5. Included in the count was $46,300 of goods that were parts for a machine that the
company no longer made. Given the high-tech nature of Teal Mountain Inc.'s products, it
was unlikely that these obsolete parts had any other use. However, management would
prefer to keep them on the books at cost, "since that is what we paid for them, after all."
46,300
588,760
Correct inventory
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