Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year endedDecember 31, the company reported Inventory of $70,000 and Cost of Goods Sold of $420,000.a. Included in Inventory (and Accounts Payable) are $10,000 of lenses held on consignment.b. Included in the Inventory balance are $5,000 of office supplies held in SLC’s warehouse.c. Excluded from the Inventory balance are $8,000 of lenses in the warehouse, ready to send to customers on January 1. SLC reported these lenses as sold on December 31, at a price of $15,000.d. Included in the Inventory balance are $3,000 of lenses that were damaged in December andwill be scrapped in January, with no recoverable value.Required:Create a table showing the balances presently reported for Inventory and Cost of Goods Sold, andthen displaying the adjustment(s) needed to correctly account for each of items ( a )–( d ), and finallydetermining the appropriate Inventory and Cost of Goods Sold balances.
Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year ended
December 31, the company reported Inventory of $70,000 and Cost of Goods Sold of $420,000.
a. Included in Inventory (and Accounts Payable) are $10,000 of lenses held on consignment.
b. Included in the Inventory balance are $5,000 of office supplies held in SLC’s warehouse.
c. Excluded from the Inventory balance are $8,000 of lenses in the warehouse, ready to send to customers on January 1. SLC reported these lenses as sold on December 31, at a price of $15,000.
d. Included in the Inventory balance are $3,000 of lenses that were damaged in December and
will be scrapped in January, with no recoverable value.
Required:
Create a table showing the balances presently reported for Inventory and Cost of Goods Sold, and
then displaying the adjustment(s) needed to correctly account for each of items ( a )–( d ), and finally
determining the appropriate Inventory and Cost of Goods Sold balances.
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