Sales/Inventory Cutoff. Your client took a complete physical inventory count under your observation as of December 15 and adjusted the inventory control account (perpetual inventory method) to agree with the physical inventory. After considering the count adjustments as of December 15 and after reviewing the transactions recorded from December 16 to December 31, you are almost ready to accept the inventory balance as fairly stated. However, your review of the sales cutoff as of December 15 and December 31 disclosed the following items not previously considered: Cost $28,400 39,100 18,900 Sales Price $36,900 50,200 21,300 Shipped 12/14 12/10 1/2 Billed 12/16 12/19 12/31 Date Credited to Inventory Control. 12/16 12/10 12/31 Required: What adjusting journal entries, if any, would you make for each of these items? Explain why each adjustment is necessary.

Sales/Inventory Cutoff. Your client took a complete physical inventory count under your observation as of December 15 and adjusted the inventory control account (perpetual inventory method) to agree with the physical inventory. After considering the count adjustments as of December 15 and after reviewing the transactions recorded from December 16 to December 31, you are almost ready to accept the inventory balance as fairly stated. However, your review of the sales cutoff as of December 15 and December 31 disclosed the following items not previously considered: Cost $28,400 39,100 18,900 Sales Price $36,900 50,200 21,300 Shipped 12/14 12/10 1/2 Billed 12/16 12/19 12/31 Date Credited to Inventory Control. 12/16 12/10 12/31 Required: What adjusting journal entries, if any, would you make for each of these items? Explain why each adjustment is necessary.

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Description: Ef 271. Sales/Inventory Cutoff. Your client took a complete physical inventory count under your observation as of December 15 andadjusted the inventory control account (perpetual inventory method) to agree with the physical inventory. After consideri

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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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

Ef 271.

Sales/Inventory Cutoff. Your client took a complete physical inventory count under your observation as of December 15 and
adjusted the inventory control account (perpetual inventory method) to agree with the physical inventory. After considering the
count adjustments as of December 15 and after reviewing the transactions recorded from December 16 to December 31, you are
almost ready to accept the inventory balance as fairly stated. However, your review of the sales cutoff as of December 15 and
December 31 disclosed the following items not previously considered:
Cost
$28,400
39,100
18,900
Sales
Price
$36,900
50,200
21,300
Shipped
12/14
12/10
1/2
Billed
12/16
12/19
12/31
Date
Credited to Inventory Control.
12/16
12/10
12/31
Required:
What adjusting journal entries, if any, would you make for each of these items? Explain why each adjustment is necessary.

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