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The management of Mark Brothers Company has engaged you to assist in the preparation of year-end (December 31) financial statements. You are told that on November 30, the correct inventory level was 150,000 units. A review of the December 31 purchase orders to various suppliers, none of these have been recorded as of December 31, 2020, shows the following: DATE DATE Shipped Received Quantity in Units 10,000 01/02/2021| 01/03/2021 |FOB Shipping Point 8,000 12/22/2020 | 12/24/2020 |FOB Destination 13,000 12/28/2020 | 01/02/2021 |FOB Shipping Point 12,000 01/02/2021 01/03/2021 FOB Shipping Point 10,000 12/31/2020 01/05/2021 |FOB Destination 15,000 01/03/2021| 01/06/2021 |FOB Destination P.O. Invoice Terms 12/02/2020 01/03/2021 12/11/2020 01/03/2021 12/13/2020 01/02/2021 12/23/2020 12/26/2020 12/28/2020 01/10/2021 12/31/2020 01/10/2021 Kevin Company uses the "Passing of legal title" for inventory recognition. During the month of December, recorded sales (at P 100.00 per unit) totaled 50,000 units including 25,000 units shipped on consignment to Three Sisters Company. A letter received from Three Sisters indicates that as of December 31, 2020, it had sold 12,000 units and was still trying to sell the remainder. The accountant of Mark Brothers recorded on the books the ending inventory by the physical inventory count. Instructions: 1. Assume a unit cost of P 50 for goods purchased, give all entries necessary to correct the accounts as of December 31, 2020. 2. Compute the number of units that should be included in the December 31, 2020 inventory.

The management of Mark Brothers Company has engaged you to assist in the preparation of year-end (December 31) financial statements. You are told that on November 30, the correct inventory level was 150,000 units. A review of the December 31 purchase orders to various suppliers, none of these have been recorded as of December 31, 2020, shows the following: DATE DATE Shipped Received Quantity in Units 10,000 01/02/2021| 01/03/2021 |FOB Shipping Point 8,000 12/22/2020 | 12/24/2020 |FOB Destination 13,000 12/28/2020 | 01/02/2021 |FOB Shipping Point 12,000 01/02/2021 01/03/2021 FOB Shipping Point 10,000 12/31/2020 01/05/2021 |FOB Destination 15,000 01/03/2021| 01/06/2021 |FOB Destination P.O. Invoice Terms 12/02/2020 01/03/2021 12/11/2020 01/03/2021 12/13/2020 01/02/2021 12/23/2020 12/26/2020 12/28/2020 01/10/2021 12/31/2020 01/10/2021 Kevin Company uses the "Passing of legal title" for inventory recognition. During the month of December, recorded sales (at P 100.00 per unit) totaled 50,000 units including 25,000 units shipped on consignment to Three Sisters Company. A letter received from Three Sisters indicates that as of December 31, 2020, it had sold 12,000 units and was still trying to sell the remainder. The accountant of Mark Brothers recorded on the books the ending inventory by the physical inventory count. Instructions: 1. Assume a unit cost of P 50 for goods purchased, give all entries necessary to correct the accounts as of December 31, 2020. 2. Compute the number of units that should be included in the December 31, 2020 inventory.

FINANCIAL ACCOUNTING
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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The management of Mark Brothers Company has engaged you to assist in the preparation of year-end (December 31) financial statements. You are told that on November 30, the correct inventory level was 150,000 units. A review of the December 31 purchase orders to various suppliers, none of these have been recorded as of December 31, 2020, shows the following: DATE P.O. 12/02/2020 01/03/2021 12/11/2020 01/03/2021 12/13/2020 01/02/2021 12/23/2020 12/26/2020 12/28/2020 01/10/2021 12/31/2020 01/10/2021 Quantity in DATE Shipped Received 10,000 01/02/2021 01/03/2021 FOB Shipping Point 8,000 12/22/2020 12/24/2020 FOB Destination 13,000 12/28/2020 01/02/2021 FOB Shipping Point 12,000 01/02/2021 01/03/2021 FOB Shipping Point 10,000 12/31/2020 01/05/2021 FOB Destination 15,000 01/03/2021 01/06/2021 FOB Destination Invoice Units Terms Kevin Company uses the Passing of legal title" for inventory recognition. During the month of December, recorded sales (at P 100.00 per unit) totaled 50,000 units including 25,000 units shipped on consignment to Three Sisters Company. A letter received from Three Sisters indicates that as of December 31, 2020, it had sold 12,000 units and was still trying to sell the remainder. The accountant of Mark Brothers recorded on the books the ending inventory by the physical inventory count. Instructions: 1. Assume a unit cost of P 50 for goods purchased, give all entries necessary to correct the accounts as of December 31, 2020. 2. Compute the number of units that should be included in the December 31, 2020 inventory.
Transcribed Image Text:The management of Mark Brothers Company has engaged you to assist in the preparation of year-end (December 31) financial statements. You are told that on November 30, the correct inventory level was 150,000 units. A review of the December 31 purchase orders to various suppliers, none of these have been recorded as of December 31, 2020, shows the following: DATE P.O. 12/02/2020 01/03/2021 12/11/2020 01/03/2021 12/13/2020 01/02/2021 12/23/2020 12/26/2020 12/28/2020 01/10/2021 12/31/2020 01/10/2021 Quantity in DATE Shipped Received 10,000 01/02/2021 01/03/2021 FOB Shipping Point 8,000 12/22/2020 12/24/2020 FOB Destination 13,000 12/28/2020 01/02/2021 FOB Shipping Point 12,000 01/02/2021 01/03/2021 FOB Shipping Point 10,000 12/31/2020 01/05/2021 FOB Destination 15,000 01/03/2021 01/06/2021 FOB Destination Invoice Units Terms Kevin Company uses the Passing of legal title" for inventory recognition. During the month of December, recorded sales (at P 100.00 per unit) totaled 50,000 units including 25,000 units shipped on consignment to Three Sisters Company. A letter received from Three Sisters indicates that as of December 31, 2020, it had sold 12,000 units and was still trying to sell the remainder. The accountant of Mark Brothers recorded on the books the ending inventory by the physical inventory count. Instructions: 1. Assume a unit cost of P 50 for goods purchased, give all entries necessary to correct the accounts as of December 31, 2020. 2. Compute the number of units that should be included in the December 31, 2020 inventory.
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