Rachel Warren, an auditor with Laplante CPAs, is performing a review of Skysong, Inc.’s inventory account. Skysong, 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 $748,000. However, the following information was not considered when determining that amount. Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number , e.g. -15,000, or parenthesis e.g. (15,000). Enter 0 if there is no effect.) Ending inventory-as reported $enter a dollar amount 1. Included in the company’s count were goods with a cost of $337,000 that the company is holding on consignment. The goods belong to Harmon Corporation. enter a dollar amount 2. The physical count did not include goods purchased by Skysong, with a cost of $47,000 that were shipped FOB destination on December 28 and did not arrive at Skysong,'s warehouse until January 3. enter a dollar amount 3. Included in the inventory account was $19,100 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. enter a dollar amount 4. The company received an order on December 29 that was boxed and 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 $47,000 and a cost of $34,500. The goods were not included in the count because they were sitting on the dock. enter a dollar amount 5. On December 29, Skysong, shipped goods with a selling price of $84,000 and a cost of $55,000 to Reza Sales Corporation FOB shipping point. The goods arrived on January 3. Reza had only ordered goods with a selling price of $10,500 and a cost of $8,100. However, a sales manager at Skysong, had authorized the shipment and said that if Reza wanted to ship the goods back next week, it could. enter a dollar amount 6. Included in the count was $45,000 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Skysong,’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.” enter a dollar amount Correct inventory $enter a total amount

Rachel Warren, an auditor with Laplante CPAs, is performing a review of Skysong, Inc.’s inventory account. Skysong, 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 $748,000. However, the following information was not considered when determining that amount. Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number , e.g. -15,000, or parenthesis e.g. (15,000). Enter 0 if there is no effect.) Ending inventory-as reported $enter a dollar amount 1. Included in the company’s count were goods with a cost of $337,000 that the company is holding on consignment. The goods belong to Harmon Corporation. enter a dollar amount 2. The physical count did not include goods purchased by Skysong, with a cost of $47,000 that were shipped FOB destination on December 28 and did not arrive at Skysong,'s warehouse until January 3. enter a dollar amount 3. Included in the inventory account was $19,100 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. enter a dollar amount 4. The company received an order on December 29 that was boxed and 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 $47,000 and a cost of $34,500. The goods were not included in the count because they were sitting on the dock. enter a dollar amount 5. On December 29, Skysong, shipped goods with a selling price of $84,000 and a cost of $55,000 to Reza Sales Corporation FOB shipping point. The goods arrived on January 3. Reza had only ordered goods with a selling price of $10,500 and a cost of $8,100. However, a sales manager at Skysong, had authorized the shipment and said that if Reza wanted to ship the goods back next week, it could. enter a dollar amount 6. Included in the count was $45,000 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Skysong,’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.” enter a dollar amount Correct inventory $enter a total amount

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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	Ending inventory-as reported	$enter a dollar amount

1.	Included in the company’s count were goods with a cost of $337,000 that the company is holding on consignment. The goods belong to Harmon Corporation.	enter a dollar amount

2.	The physical count did not include goods purchased by Skysong, with a cost of $47,000 that were shipped FOB destination on December 28 and did not arrive at Skysong,'s warehouse until January 3.	enter a dollar amount

3.	Included in the inventory account was $19,100 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.	enter a dollar amount

4.	The company received an order on December 29 that was boxed and 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 $47,000 and a cost of $34,500. The goods were not included in the count because they were sitting on the dock.	enter a dollar amount

5.	On December 29, Skysong, shipped goods with a selling price of $84,000 and a cost of $55,000 to Reza Sales Corporation FOB shipping point. The goods arrived on January 3. Reza had only ordered goods with a selling price of $10,500 and a cost of $8,100. However, a sales manager at Skysong, had authorized the shipment and said that if Reza wanted to ship the goods back next week, it could.	enter a dollar amount

6.	Included in the count was $45,000 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Skysong,’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.”	enter a dollar amount

	Correct inventory	$enter a total amount

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