„Problem 13-14 (AICPA Adapted) In conducting an audit of Ultimate Company for the year ended June 30, 2020, the CPA observed the physical inventory at an interim date, May 31, 2020, instead of at year end. The following information was obtained from the ledger. general 875,000 950,000 8,400,000 9,600,000 Inventory, July 1, 2019 Physical inventory, May 31, 2020 Sales for 11 months ended May 31, 2020 Sales for year ended June 30, 2020 Purchases for 11 months ended May 31, 2020 before audit adjustments Purchases for year ended June 30, 2020 before audit adjustments 6,750,000 8,000,000 1. Shipments received in May and included in the physical inventory but recorded as June purchases 75,000 b. Shipments received in unsalable condition and excluded from physical inventory. Credit memos had not been received nor had chargebacks to vendors been recorded: 10,000 Total at May 31, 2020 Total at June 30, 2020, including the May unrecorded chargebacks 15,000 c. Deposit made with vendor and charged to purchases in April, 2020. Product was shipped in July, 2020 . 20,000 d. Deposit made with vendor and charged to purchases in May, 2020. Product was shipped FOB destination, on May 29, 2020 and was included in May 31, 2020 physical inventory as goods in transit 55,000 e. Through the carelessness of the receiving department a June shipment was damaged by rain. This shipment was later sold in June at its cost of 100,000
„Problem 13-14 (AICPA Adapted) In conducting an audit of Ultimate Company for the year ended June 30, 2020, the CPA observed the physical inventory at an interim date, May 31, 2020, instead of at year end. The following information was obtained from the ledger. general 875,000 950,000 8,400,000 9,600,000 Inventory, July 1, 2019 Physical inventory, May 31, 2020 Sales for 11 months ended May 31, 2020 Sales for year ended June 30, 2020 Purchases for 11 months ended May 31, 2020 before audit adjustments Purchases for year ended June 30, 2020 before audit adjustments 6,750,000 8,000,000 1. Shipments received in May and included in the physical inventory but recorded as June purchases 75,000 b. Shipments received in unsalable condition and excluded from physical inventory. Credit memos had not been received nor had chargebacks to vendors been recorded: 10,000 Total at May 31, 2020 Total at June 30, 2020, including the May unrecorded chargebacks 15,000 c. Deposit made with vendor and charged to purchases in April, 2020. Product was shipped in July, 2020 . 20,000 d. Deposit made with vendor and charged to purchases in May, 2020. Product was shipped FOB destination, on May 29, 2020 and was included in May 31, 2020 physical inventory as goods in transit 55,000 e. Through the carelessness of the receiving department a June shipment was damaged by rain. This shipment was later sold in June at its cost of 100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:at an interim date, May 31, 2020, instead of at year end.
The following information was obtained from the general
ended June 30, 2020, the CPA observed the physical inventory
„Problem 13-14 (AICPA Adapted)
year
In conducting an audit of Ultimate Company for the
ledger.
875,000
950,000
8,400,000
9,600,000
Inventory, July 1, 2019
Physical inventory, May 31, 2020
Sales for 11 months ended May 31, 2020
Sales for year ended June 30, 2020
Purchases for 1 months ended May 31, 2020
before audit adjustments
Purchases for year ended June 30, 2020
before audit adjustments
6,750,000
8,000,000
1. Shipments received in May and included in the
physical inventory but recorded as June purchases
75,000
b. Shipments received in unsalable condition and
excluded from physical inventory. Credit memos
had not been received nor had chargebacks to
vendors been recorded:
10,000
Total at May 31, 2020
Total at June 30, 2020, including the May
unrecorded chargebacks
15,000
c. Deposit made with vendor and charged to purchases
in April, 2020. Product was shipped in July, 2020 .
20,000
d. Deposit made with vendor and charged to purchases
in May, 2020. Product was shipped FOB destination,
on May 29, 2020 and was included in May 31, 2020
physical inventory as goods in transit
55,000
e. Through the carelessness of the receiving department
a June shipment was damaged by rain. This shipment
was later sold in June at its cost of
100,000
376
Transcribed Image Text:A What is the inventory on June 30, 2020?
a. 1,160,000
b. 1,240,000
c. 1,340,000
d. 1,140,000.
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