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Vogts Company sells TVs. The perpetual inventory was stated as $38,500 on the books at December 31, 2017. At the close of the year, a new approach for compiling inventory was used and apparently a satisfactory cut-off for preparation of financial statements was not made. Some events that occurred are as follows. 1. TVs shipped to a customer January 2, 2018, costing $5,000 were included in inventory at December 31, 2017. The sale was recorded in 2018. 2. TVs costing $15,000 received December 30, 2017, were recorded as received on January 2, 2018. 3. TVs received during 2017 costing $4,600 were recorded twice in the inventory account. 4. TVs shipped to a customer December 28, 2017, f.o.b. shipping point, which cost $10,000, were not received by the customer until January, 2018. The TVs were included in the ending inventory. 5. TVs on hand that cost $6,100 were never recorded on the books. Compute the correct inventory at December 31, 2017.

Answer :

Answer:

$45,000

Explanation:

The computation of correct inventory is shown below:-

Unadjusted Inventory value                   $38,500

Add: TVs received on Dec.30,2017       $15,000

Less: TVs received recorded twice        $4,600

Less : TVs shipped to Customer

FOB shipping point                                 $10,000

Add: TVs on hand not recorded             $6,100    

Correct Inventory at December 31,2017  $45,000

Therefore we are not considering  Point no.1 as TVs were shipped in Jan.2,2018 and sale also recorded in 2018.

anthougo

The computation of the correct inventory at December 31, 2017, is as follows:

Stated inventory at December 31, 2017 =                                $38,500

Events:

1. Shipment to a customer on January 2, 2018                                  $0

2. Shipment received on December 30, 2017 =                     +$15,000

3. Double recording of inventory =                                            -$4,600

4. Shipment (FOB Shipping point) on December 28, 2017 = -$10,000

5. Inventory not recorded =                                                       +$6,100

Correct inventory at December 31, 2017 =                             $45,100

Data Analysis:

Stated inventory  = $38,500

Events:

1. Shipment to a customer on January 2, 2018 = $5,000 correct

2. Shipment received on December 30, 2017 = +$15,000 incorrect

3. Double recording of inventory = -$4,600 incorrect

4. Shipment (FOB Shipping point) on December 28, 2017 = -$10,000 incorrect

5. Inventory not recorded = +$6,100 incorrect

Thus, the correct amount of the Ending Inventory on December 31, 2017, is $45,000.

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