Scenario 1:Rocky Inc hired a new intern from CSU to help with year-end inventory. The interncomputed the inventory counts at the end of 2020 and 2021. However, the intern's manager,a UNC grad, noticed that the ending inventory did not include inventory on consignment to aretail customer of $3,000 at the end of year 2020 and $6,000 at the end of year 2021. Whatwas the effect of the error (if any] on 2021's statements (amount and whether it was under- (too low) or over-stated (too high)? If there is no effect, put OK

The objective of the question is to determine the effect of an error in inventory calculation on the…

Answered: Scenario 1:Rocky Inc hired a new intern…

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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A new accountant prepared the following general journal entry on March 31, 2024, for Rock Castle Construction. The general journal entry includes an error. Choose the best explanation of the error from the choices provided. DR: 12000 Inventory $5,575 CR: 10100 Checking $5,575 Purchase of inventory Please add checkmark next to the correct answer(s). 1 Inventory should have been credited, not debited. 2 The account # for inventory is incorrect; should be 12100. 3 The checking account should have been debited, not credited. 4 The Inventory account should never be adjusted by a general journal entry. 5 None of the above
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.
Lime Supplies had a miscount of inventory at $22,000 for the year end May 31, 2022. The correct amount should have been $25,000. If this error was never corrected, and assuming the inventory count was correct for 2023, how much would this error impact the cost of goods sold in 2022? Select one: a. Not impacted at all. b. $3,000 overstated c. $ 47,000 understated d. $3,000 understated
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.
1. A business may need to estimate its amount of inventory because perpetual inventory records are not maintained. a disaster has destroyed the inventory records and the inventory. monthly or quarterly financial statements are needed, but a physical inventory is taken only once a year. All of these choices are correct. 2. When using the retail method of inventory costing, the ending inventory cost is estimated by multiplying the ending inventory at retail by the cost to retail ratio. multiplying the ending inventory at cost by the cost to retail ratio. deducting the estimated cost of goods sold from the merchandise available for sale. deducting the estimated gross profit from the sales.
Assume that because of a clerical error, the ending inventory is reported to be 1,070 units rather than the actual number of units (1,170) on hand. 5a. If FIFO is used, calculate the amount of the understatement or overstatement in the cost of sales for the first six months of the current year. Overstatement of cost of sales 5b. If FIFO is used, calculate the amount of the understatement or overstatement in the current assets at June 30 of the current year. Understatement of current assets
In your audit of James Smith Company, you find that a physical inventory on December 31, 2020, showed merchandise with a cost of $449,390 was on hand at that date. You also discover the following items were all excluded from the $449,390. 1. 2. 3. 4. 5. Merchandise of $61,150 which is held by Smith on consignment. The consignor is the Max Suzuki Company. Merchandise costing $36,420 which was shipped by Smith f.o.b. destination to a customer on December 31, 2020. The customer was expected to receive the merchandise on January 6, 2021. Merchandise costing $47,720 which was shipped by Smith f.o.b. shipping point to a customer on December 29, 2020. The customer was scheduled to receive the merchandise on January 2, 2021. Merchandise costing $83,030 shipped by a vendor f.o.b. destination on December 30, 2020, and received by Smith on January 4, 2021. Merchandise costing $49,200 shipped by a vendor f.o.b. shipping point on December 31, 2020, and received by Smith on January 5, 2021. Based on…
Q: Which misstatement below is more difficult to detect? Explain.(i)The inventory costing $ 150,000 being ordered by customers before the year end was excluded from the ending inventory balance as they are set aside for delivery after year end. The ending balance of inventory as on the statement of financial position was $ 600,000.(ii) Inventory list shows 40 boxes of rice but only 38 boxes were found in the warehouse.(iii) The inventory has a cost of $600,000 and realizable value of $540,000 as the items are outdated. The ending balance of inventory as on the statement of financial position was $ 600,000.
Bramble Decor did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $735,000. However, the following information was not considered when determining that amount.Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number , e.g. -15,000, or parenthesis e.g. (15,000). Enter 0 if there is no effect.) Ending inventory-as reported $enter a dollar amount 1. Included in the company’s count were goods with a cost of $252,000 that the company is holding on consignment. The goods belong to Kroeger Company. enter a dollar amount 2. The physical count did not include goods purchased by Bramble with a cost of $42,000 that were shipped FOB destination on December 28 and did not arrive at Bramble warehouse until January 3. enter a dollar amount…
Kari Downs, an auditor with Wheeler CPAS, is performing a review of Waterway Company's inventory account. Waterway did not have a 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 negative sign 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 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 $35,000 that were shipped FOB destination on December 28 and did not arrive at Waterway warehouse until January 3.…

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