You were engaged to perform an audit of the accounts of the Fontana Blue Corporation for the year ended December 31, 2021, and have observed the taking of the physical inventory of the company on December 29, 2021. Only merchandise shipped by the Fontana Blue Corporation to customers up to and including December 29, 2021 have been eliminated from inventory. The inventory as determined by physical inventory count has been recorded in the books by the company's controller. No perpetual inventory records are maintained. All sales are made on an FOB shipping point basis. You are to assume that all purchase invoices have been correctly recorded. The following lists of sales invoices are entered in the sales books for the months of December, 2021 and January, 2022, respectively. Sales Invoice Sales Invoice Cost of Goods Amount Date Sold Date Shipped 20,000 18,000 December, 2021 a 30,000 Dec. 21 31-Dec-21 b 2,200 Dec. 31 31-Dec-21 10,000 Dec. 29 6,000 30-Dec-21 d 40,000 Dec. 31 24,000 03-Jan-22 e 100,000 Dec. 30 56,000 29-Dec-21 (shipped to consignee )* f 120,000 Dec. 30 80,000 02-Jan-22 January, 2022 60,000 Dec. 31 40,000 30-Dec-21 40,000 Jan. 2 23,000 02-Jan-22 i 80,000 Jan. 3 55,000 31-Dec-21 j 90,000 Jan. 4 64,000 29-Dec-21 *Verification from the consignee indicates that 60% of the merchandise is still unsold at December 31, 2021.
You were engaged to perform an audit of the accounts of the Fontana Blue Corporation for the year ended December 31, 2021, and have observed the taking of the physical inventory of the company on December 29, 2021. Only merchandise shipped by the Fontana Blue Corporation to customers up to and including December 29, 2021 have been eliminated from inventory. The inventory as determined by physical inventory count has been recorded in the books by the company's controller. No perpetual inventory records are maintained. All sales are made on an FOB shipping point basis. You are to assume that all purchase invoices have been correctly recorded. The following lists of sales invoices are entered in the sales books for the months of December, 2021 and January, 2022, respectively. Sales Invoice Sales Invoice Cost of Goods Amount Date Sold Date Shipped 20,000 18,000 December, 2021 a 30,000 Dec. 21 31-Dec-21 b 2,200 Dec. 31 31-Dec-21 10,000 Dec. 29 6,000 30-Dec-21 d 40,000 Dec. 31 24,000 03-Jan-22 e 100,000 Dec. 30 56,000 29-Dec-21 (shipped to consignee )* f 120,000 Dec. 30 80,000 02-Jan-22 January, 2022 60,000 Dec. 31 40,000 30-Dec-21 40,000 Jan. 2 23,000 02-Jan-22 i 80,000 Jan. 3 55,000 31-Dec-21 j 90,000 Jan. 4 64,000 29-Dec-21 *Verification from the consignee indicates that 60% of the merchandise is still unsold at December 31, 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Transcribed Image Text:Problem 2
You were engaged to perform an audit of the accounts of the Fontana Blue Corporation for the
year ended December 31, 2021, and have observed the taking of the physical inventory of the
company on December 29, 2021. Only merchandise shipped by the Fontana Blue Corporation to
customers up to and including December 29, 2021 have been eliminated from inventory. The
inventory as determined by physical inventory count has been recorded in the books by the
company's controller. No perpetual inventory records are maintained. All sales are made on an
FOB shipping point basis. You are to assume that all purchase invoices have been correctly
recorded.
The following lists of sales invoices are entered in the sales books for the months of December,
2021 and January, 2022, respectively.
Sales Invoice
Sales Invoice
Cost of Goods
Amount
Date
Sold
Date Shipped
December, 2021 a
30,000 Dec. 21
20,000
31-Dec-21
2,200 Dec. 31
18,000
31-Dec-21
10,000 Dec. 29
6,000
30-Dec-21
d
40,000 Dec. 31
24,000
03-Jan-22
e
100,000 Dec. 30
56,000
29-Dec-21
(shipped to consignee )*
120,000 Dec. 30
80,000
02-Jan-22
January, 2022
60,000 Dec. 31
40,000
30-Dec-21
40,000 Jan. 2
23,000
02-Jan-22
80,000 Jan. 3
55,000
31-Dec-21
j
90,000 Jan. 4
64,000
29-Dec-21
*Verification from the consignee indicates that 60% of the merchandise is still unsold at December
31, 2021.
REQUIRED:
Prepare the necessary adjusting journal entries at December 31, 2021 in connection with the
foregoing information.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education