ROBLEM 8: EEE Company is a wholesale distributor of automotive replacement parts. EEE’s accounting records on December 31, 2021 shows its inventory at P1,870,000 based on count. Additional data regarding its inventory are as follows: A. Parts held on consignment from another entity to EEE, the consignee, amountingtoP170,000 were included in the physical count on December 31, 2021 and in accounts payable on December 31, 2021. B. P20,000 worth of parts which were purchased and paid for in December 2021 weresold in the last week of 2021 and appropriately recorded as sales of P28,000. The parts were included in the physical count on December 31, 2021 because the parts wereonthe loading dock waiting to be picked up by the customer. C. Parts in transit on December 31, 2021 to customers, shipped FOB shipping point onDecember 28, 2021 amounted to P34,000. The customers received the parts onJanuary 6, 2022. Sales of P40,000 to the customers for the parts were recorded by EEEon January 2, 2022. E. Retailers were holding P210,000 at cost and P250,000 at retail, of goods onconsignment from EEE, at their stores on December 31, 2021. F. Goods were in transit from a vendor to EEE on December 31, 2021. The cost of goods was P25,000. The goods were shipped FOB seller on December 29, 2021. Determine the amount of adjustments for EEE’s inventory, accounts payable andnet income, if an
PROBLEM 8: EEE Company is a wholesale distributor of automotive replacement parts. EEE’s accounting records on December 31, 2021 shows its inventory at P1,870,000 based on count. Additional data regarding its inventory are as follows:
A. Parts held on consignment from another entity to EEE, the consignee, amountingtoP170,000 were included in the physical count on December 31, 2021 and in accounts payable on December 31, 2021.
B. P20,000 worth of parts which were purchased and paid for in December 2021 weresold in the last week of 2021 and appropriately recorded as sales of P28,000. The parts were included in the physical count on December 31, 2021 because the parts wereonthe loading dock waiting to be picked up by the customer.
C. Parts in transit on December 31, 2021 to customers, shipped FOB shipping point onDecember 28, 2021 amounted to P34,000. The customers received the parts onJanuary 6, 2022. Sales of P40,000 to the customers for the parts were recorded by EEEon January 2, 2022.
E. Retailers were holding P210,000 at cost and P250,000 at retail, of goods onconsignment from EEE, at their stores on December 31, 2021.
F. Goods were in transit from a vendor to EEE on December 31, 2021. The cost of goods was P25,000. The goods were shipped FOB seller on December 29, 2021.
- Determine the amount of adjustments for EEE’s inventory, accounts payable andnet income, if any.
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