Reagan Corporation is a wholesale distributor of truck replacement parts. Initial amounts taken from Reagan's records are as follows: Inventory at December 31 (based on a physical count of goods in Reagan's warehouse on December 31) $1,320,000 Accounts payable at December 31: Vendor Terms Amount Baker Company Charlie Company Dolly Company Eagler Company Full Company 28, 10 days, net 30 Net 30 Net 30 Net 30 $279,000 224,000 314,000 239,000 Net 30 Greg Company Net 30 Accounts payable, December 31 $1,056,000 Sales for the year $9,350,000 Additional Information: 1. Parts held by Reagan on consignment from Charlie, amounting to $190,000, were included in the physical count of goods in Reagan's warehouse and in accounts payable at December 31. 2. Parts totaling $29,000, which were purchased from Full and paid for in December, were sold in the last week of the year and appropriately recorded as sales of $35,00O. The parts were included in the physical count of goods in Reagan's warehouse on December 31 because the parts were on the loading dock waiting to be picked up by customers. 3. Parts in transit on December 31 to customers, shipped f.o.b. shipping point on December 28, amounted to $48,000. The customers received the parts on January 6 of the following year. Sales of $54,000 to the customers for the parts were recorded by Reagan on January 2. 4. Retailers were holding goods on consignment from Reagan, which had a cost of $280,000 and a retail value of $320,000. 5. Goods were in transit from Greg to Reagan on December 31. The cost of the goods was $32,000, and they were shipped f.o.b. shipping point on December 29.
Reagan Corporation is a wholesale distributor of truck replacement parts. Initial amounts taken from Reagan's records are as follows: Inventory at December 31 (based on a physical count of goods in Reagan's warehouse on December 31) $1,320,000 Accounts payable at December 31: Vendor Terms Amount Baker Company Charlie Company Dolly Company Eagler Company Full Company 28, 10 days, net 30 Net 30 Net 30 Net 30 $279,000 224,000 314,000 239,000 Net 30 Greg Company Net 30 Accounts payable, December 31 $1,056,000 Sales for the year $9,350,000 Additional Information: 1. Parts held by Reagan on consignment from Charlie, amounting to $190,000, were included in the physical count of goods in Reagan's warehouse and in accounts payable at December 31. 2. Parts totaling $29,000, which were purchased from Full and paid for in December, were sold in the last week of the year and appropriately recorded as sales of $35,00O. The parts were included in the physical count of goods in Reagan's warehouse on December 31 because the parts were on the loading dock waiting to be picked up by customers. 3. Parts in transit on December 31 to customers, shipped f.o.b. shipping point on December 28, amounted to $48,000. The customers received the parts on January 6 of the following year. Sales of $54,000 to the customers for the parts were recorded by Reagan on January 2. 4. Retailers were holding goods on consignment from Reagan, which had a cost of $280,000 and a retail value of $320,000. 5. Goods were in transit from Greg to Reagan on December 31. The cost of the goods was $32,000, and they were shipped f.o.b. shipping point on December 29.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Why does it say incomplete?
Transcribed Image Text:Reagan Corporation is a wholesale distributor of truck replacement parts. Initial amounts taken from Reagan's records are as follows:
Inventory at December 31 (based on a physical count
of goods in Reagan's warehouse on December 31)
$1,320,000
Accounts payable at December 31:
Vendor
Baker Company
Charlie Company
Dolly Company
Eagler Company
Full Company
Terms
28, 10 days, net 30
Amount
279,000
224,000
314,000
239,000
Net 30
Net 30
Net 30
Net 30
Greg Company
Net 30
Accounts payable, December 31
$1,056,000
Sales for the year
$9,350,000
Additional Information:
1. Parts held by Reagan on consignment from Charlie, amounting to $190,000, were included in the physical count of goods in
Reagan's warehouse and in accounts payable at December 31.
2. Parts totaling $29,000, which were purchased from Full and paid for in December, were sold in the last week of the year and
appropriately recorded as sales of $35,000. The parts were included in the physical count of goods in Reagan's warehouse on
December 31 because the parts were on the loading dock waiting to be picked up by customers.
3. Parts in transit on December 31 to customers, shipped f.o.b. shipping point on December 28, amounted to $48,000. The customers
received the parts on January 6 of the following year. Sales of $54,000 to the customers for the parts were recorded by Reagan on
January 2.
4. Retailers were holding goods on consignment from Reagan, which had a cost of $280,000 and a retail value of $320,000.
5. Goods were in transit from Greg to Reagan on December 31. The cost of the goods was $32,000, and they were shipped f.o.b.
shipping point on December 29.
Transcribed Image Text:SIPping poliL OT DELCIIUEI 23.
6. A freight bill in the amount of $2,700 specifically relating to merchandise purchased in December, all of which was still in the
inventory at December 31, was received on January 3. The freight bill was not included in either the inventory or in accounts
payable at December 31.
7. All the purchases from Baker occurred during the last seven days of the year. These items have been recorded in accounts payable
and accounted for in the physical inventory at cost before discount. Reagan's policy is to pay invoices in time to take advantage of
all discounts, adjust inventory accordingly, and record accounts payable net of discounts.
Required:
Complete the following schedule of adjustments to the initial amounts.. (Amounts to be deducted should be indicated with a minus
sign.)
XAnswer is not complete.
Accounts
Inventory
Sales
Payable
2$
Initial amounts
1,320,000
1,056,000
$ 9,350,000
Adjustments-increase (decrease):
1.
(190,000)
(190,000) O
2.
(29,000)
3.
54,000
4.
280,000
5.
32,000
32,000
6.
2,700
2,700
7.
Total adjustments
95,700
(155,300)
54,000
Adjusted amounts
$
1,415,700
24
900,700
$ 9,404,000
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