KariDowns, an auditor with Wheeler CPAS, is performing a review of Waterway Company's inventory account. Waterway did not havea good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $747,000. However, the following information was not considered when determining that amount.(a1) Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negativesign preceding the number, e.g. -15,000, or parenthesis e.g. (15,000). Enter O if there is no effect.)1.2.3.4.5.6.Ending inventory-as reportedIncluded in the company's count were goods with a cost of $257,000 that the company isholding on consignment. The goods belong to Kroeger Corporation.The physical count did not include goods purchased by Waterway with a cost of$35,000 that were shipped FOB destination on December 28 and did not arrive atWaterway warehouse until January 3.Included in the inventory account was $10,000 of office supplies that were stored in thewarehouse and were to be used by the company's supervisors and managers during thecoming year.The company received an order on December 29 that was boxed and sitting on the loadingdock awaiting pick-up on December 31. The shipper picked up the goods on January 1 anddelivered them on January 6. The shipping terms were FOB shipping point. The goods had aselling price of $49,000 and a cost of $38,000. The goods were not included in the countbecause they were sitting on the dock.On December 29, Waterway shipped goods with a selling price of $78,000 and a cost of$51,000 to Macchia Sales Corporation FOB shipping point. The goods arrived on January 3.Macchia had only ordered goods with a selling price of $15,000 and a cost of $8,000.However, a sales manager at Waterway had authorized the shipment and said that ifMachia wanted to ship the goods back next week, it could.Included in the count was $34,000 of goods that were parts for a machine that the companyno longer made. Given the high-tech nature of Waterway's products, it was unlikely thatthese obsolete parts had any other use. However, management would prefer to keep themon the books at cost, "since that is what we paid for them, after all."Correct inventory$$

The correct inventory amount can be determined by adjusting the reported inventory balance for the…

ri Downs, an auditor with Wheeler CPAs, is performing a review of Waterway Company's inventory account. Waterway did good year, and top management is under pressure to boost reported income. According to its records, the inventory balance d was $747,000. However, the following information was not considered when determining that amount. 1) Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a r in preceding the number, e.g. -15,000, or parenthesis e.g. (15,000). Enter O if there is no effect.) Ending inventory-as reported Included in the company's count were goods with a cost of $257,000 that the company is holding on consignment. The goods belong to Kroeger Corporation. The physical count did not include goods purchased by Waterway with a cost of tA

ri Downs, an auditor with Wheeler CPAs, is performing a review of Waterway Company's inventory account. Waterway did good year, and top management is under pressure to boost reported income. According to its records, the inventory balance d was $747,000. However, the following information was not considered when determining that amount. 1) Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a r in preceding the number, e.g. -15,000, or parenthesis e.g. (15,000). Enter O if there is no effect.) Ending inventory-as reported Included in the company's count were goods with a cost of $257,000 that the company is holding on consignment. The goods belong to Kroeger Corporation. The physical count did not include goods purchased by Waterway with a cost of tA

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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You own a retailer of boats, motors, and marine accessories. The store manager has just informed you that the amount of the physical inventory was incorrectly reported as $630,000 instead of the correct amount of $360,000. Unfortunately, yesterday you sent the quarterly financial statements to the stockholders. Now you must send revised statements and a letter of explanation. (a) What effect did the error have on the items of the balance sheet for the retailer? Express your answer as overstatedor understated for the items affected by the error. Merchandise inventory was by $ . Therefore, Current assets, Total assets, and Total stockholders' equity were by $ . (b) What effect will the error have on the items of the income statement for the retailer? The cost of goods sold was by $ . Therefore, gross profit and net income were by $ . (c) Did this error make the retailer's quarterly results look better or worse than they actually were? The inventory error made…
Office Outfitters Inc. which uses a perpetual inventory system, experienced an inventory shrinkage of $3,750. What accounts would be increased and decreased to record the adjustment for the inventory shrinkage at the end of the accounting period?
Sandra: We are beginning our audit of Imex and have prepared ratio analyses to determine if there have been significant changes in financial position. This helps us guide the audit process. This analysis indicates that the inventory turnover has decreased from 5 to 2.8 and the accounts receivable turnover has decreased from 12 to 8. I was wondering if you could explain this change in operations. Travis: There is little need for concern. The inventory represents computers that we were unable to sell during the holiday buying season. We are confident, however, that we will be able to sell these computers as we move into the next fiscal year. Sandra: What gives you this confidence? Travis: We will increase our advertising and provide some very attractive price concessions to move these machines. We have no choice. Newer technology is already out there, and we have to unload this inventory. Sandra: …and the receivables? Travis: As you may be aware, the company is under tremendous pressure…
First Bank is considering giving Oriole Company a loan. First, however, it decides that it would be a good idea to have further discussions with Oriole's accountant. One area of particular concern is the inventory account, which has a December 31 balance of $309,100. Discussions with the accountant reveal the following: 1. The physical count of the inventory did not include goods that cost $104,500 that were shipped to Oriole, FOB shipping point, on December 27 and were still in transit at year end. 2. Oriole sold goods that cost $38,500 to Ivanhoe Company, FOB destination, on December 28. The goods are not expected to arrive at their destination in India until January 12. The goods were not included in the physical inventory because they were not in the warehouse. 3. On December 31, Grouper Company had $33,550 of goods held on consignment for Oriole. The goods were not included in Oriole's ending inventory balance. 4. Oriole received goods that cost $30,800 on January 2. The goods…
PLEASE FILL IN THE CIRCLED BOXES. THE REST OF THE VALUES IN OTHER BOXES ARE CORRECT. Note:- • Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. • Answer completely. • You will get up vote for sure.
Do not provide handwritten solution,Maintain accuracy and quality in your answer,Take care of plagiarism,Answer completely,You will get up vote for sure.
Larkspur is trying to determine value of its ending inventory as of Feb 28, 2017, company's year end. Accountant counted everything on the warehouse on Feb 28, ending inventory valuation of 46400. However, they didn't know how to treat the following transactions so they aren't recorded. First column asks, should it be included? Yes or no. Second column the amount
You have been hired as the new controller for the Ralston Company. Shortly after joining the company in 2024, you discover the following errors related to the 2022 and 2023 financial statements: a. Inventory at 12/31/2022 was understated by $6,400. b. Inventory at 12/31/2023 was overstated by $9,800. c. On 12/31/2023, inventory was purchased for $3,400. The company did not record the purchase until the inventory was paid for early in 2024. At that time, the purchase was recorded by a debit to purchases and a credit to cash. The company uses a periodic inventory system. Required: 1. Assuming that the errors were discovered after the 2023 financial statements were issued, analyze the effect of the errors on 2023 and 2022 cost of goods sold, net income, and retained earnings. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
During the taking of its physical inventory on December 31, 20Y4, Barry's Bike Shop incorrectly counted its inventory as $225,870 instead of the correct amount of $179,251. The effect on the balance sheet and income statement would be a. assets overstated by $46,619; retained earnings understated by $46,619; and net income statement understated by $46,619 b. assets overstated by $46,619; retained earnings understated by $46,619; and no effect on the income statement c. assets, retained earnings, and net income all overstated by $46,619 d. assets and retained earnings overstated by $46,619; and net income understated by $46,619