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Required: Determine the adjusted balances of the following as of December 31, 2022 1. Inventory 2. Net Sales 3. Accounts Payable

Required: Determine the adjusted balances of the following as of December 31, 2022 1. Inventory 2. Net Sales 3. Accounts Payable

FINANCIAL ACCOUNTING
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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Question No. 2 STUVWXYZ Trading Company sells luxury items to global entertainment personalities. In your audit of the company, following information was obtained from the company's accounting records for the year ended December 31, 2022. Inventory at December 31, 2022 (based on physical count in STUVWXYZ's warehouse at cost on December 31, 2022) Accounts Payable 1,329,000 980,000 3,742,000 Net Sales A. Iron Materials costing P50,000 and billed on December 30 at a selling price of P64,000 had been segregated in the warehouse for inventory as a signed purchase order had been received from Robert Downey, Jr. Terms, FOB destination. B. Sales out on consignment to Chris Evans amounting to P68,000 was recorded as sales on December 31 even though the goods have been sold in early 2023. The cost of the goods amounted to P34,000 was not included in the count. C. Goods held on consignment from Chris Hemsworth, consignor, amounting to P118,000 were included in the physical count of goods in STUVWXYZ's warehouse on December 31 2022, and in accounts payable at December 31, 2022. D. Pashmina shawls sold to Scarlett Johansson on COD, costing P10,000, was shipped December 29, 2022. Sales was recorded upon shipment. The goods were received and paid by Ms. Jahansson January 3, 2023 for P28,000 at that time. E. An invoice for P75,000 was shipped FOB shipping point from Jeremy Renner was received and recorded on December 31, 2022. The invoice shows the goods had been shipped on December 28, 2022 and the receiving report indicated the goods had been received by STUVWXYZ on December 31, 2022 and recorded at selling price of P95,000. F. A luxury pool and snooker table costing P150,000 was sold on an installment basis on December 10, 2022. It was delivered to Paul Rudd on that date. The luxury table was included in inventory because STUVWXYZ still holds legal title. Per company's experience, all installment sales were fully settled. G. Prada sunglass sold to Brie Larson for P250,000 and costing P200,000 was recorded but still on hand and included in the inventory at year end. The Ms. Larson requested STUVWXYZ to hold physically the item pending completion of her dress to suit the sunglass. STUVWXYZ agreed to Ms. Larson's request and does not intend to resell the sunglass. H. Consigned goods to Karen Gillan, consignee, (costing P72,000) in December, 2022, priced at P86,500, was purchased by Ms. Gillan herself. The sale is unrecorded at year-end, 2022 pending receipt of the sale advice from Ms. Gillan. 1. Included in the inventory of physical count were goods received from Jon Favreau, vendor, on December 27, 2022. However, the related invoice for P77,000 was not recorded because the copy of the receiving report for the accounting department was lost. J. In transit to customer Bradley Cooper on December 31, 2022 were perfumeries costing P91,000 shipped FOB shipping point on December 26, 2022. A sales invoice for P112,500 was issued and recorded on January 3, 2023 when STUVWXYZ was notified by Mr. Cooper that the items had been received. Required: Determine the adjusted balances of the following as of December 31, 2022 1. Inventory 2. Net Sales 3. Accounts Payable
Transcribed Image Text:Question No. 2 STUVWXYZ Trading Company sells luxury items to global entertainment personalities. In your audit of the company, following information was obtained from the company's accounting records for the year ended December 31, 2022. Inventory at December 31, 2022 (based on physical count in STUVWXYZ's warehouse at cost on December 31, 2022) Accounts Payable 1,329,000 980,000 3,742,000 Net Sales A. Iron Materials costing P50,000 and billed on December 30 at a selling price of P64,000 had been segregated in the warehouse for inventory as a signed purchase order had been received from Robert Downey, Jr. Terms, FOB destination. B. Sales out on consignment to Chris Evans amounting to P68,000 was recorded as sales on December 31 even though the goods have been sold in early 2023. The cost of the goods amounted to P34,000 was not included in the count. C. Goods held on consignment from Chris Hemsworth, consignor, amounting to P118,000 were included in the physical count of goods in STUVWXYZ's warehouse on December 31 2022, and in accounts payable at December 31, 2022. D. Pashmina shawls sold to Scarlett Johansson on COD, costing P10,000, was shipped December 29, 2022. Sales was recorded upon shipment. The goods were received and paid by Ms. Jahansson January 3, 2023 for P28,000 at that time. E. An invoice for P75,000 was shipped FOB shipping point from Jeremy Renner was received and recorded on December 31, 2022. The invoice shows the goods had been shipped on December 28, 2022 and the receiving report indicated the goods had been received by STUVWXYZ on December 31, 2022 and recorded at selling price of P95,000. F. A luxury pool and snooker table costing P150,000 was sold on an installment basis on December 10, 2022. It was delivered to Paul Rudd on that date. The luxury table was included in inventory because STUVWXYZ still holds legal title. Per company's experience, all installment sales were fully settled. G. Prada sunglass sold to Brie Larson for P250,000 and costing P200,000 was recorded but still on hand and included in the inventory at year end. The Ms. Larson requested STUVWXYZ to hold physically the item pending completion of her dress to suit the sunglass. STUVWXYZ agreed to Ms. Larson's request and does not intend to resell the sunglass. H. Consigned goods to Karen Gillan, consignee, (costing P72,000) in December, 2022, priced at P86,500, was purchased by Ms. Gillan herself. The sale is unrecorded at year-end, 2022 pending receipt of the sale advice from Ms. Gillan. 1. Included in the inventory of physical count were goods received from Jon Favreau, vendor, on December 27, 2022. However, the related invoice for P77,000 was not recorded because the copy of the receiving report for the accounting department was lost. J. In transit to customer Bradley Cooper on December 31, 2022 were perfumeries costing P91,000 shipped FOB shipping point on December 26, 2022. A sales invoice for P112,500 was issued and recorded on January 3, 2023 when STUVWXYZ was notified by Mr. Cooper that the items had been received. Required: Determine the adjusted balances of the following as of December 31, 2022 1. Inventory 2. Net Sales 3. Accounts Payable
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