Web Problems

Problem 8-B
Problem 8-C
Problem 8-D
Problem 8-E
Problem 8-F
Problem 8-G

1. Parts received on consignment from Avalon Corporation by McGuire, the consignee, amounting to $150,000, were included in the physical count of goods in McGuire's warehouse on December 31, 1996, and in accounts payable at December 31, 1996.
   
2. Parts costing $20,000 that were purchased from Boone and paid for in December 1996 were sold in the last week fo 1996 and appropriately recorded as sales of $28,000. The parts were included in the physical count of goods in McGuire's warehouse on December 31, 1996, because the parts were on the loading dock waiting to be picked up by customers.
   
3. Parts in transit on December 31, 1996, to customers, shipped f.o.b. shipping point, on December 28, 1996, amounted to $34,000. The customers received the parts on January 6, 1997. Sales of $50,000 to the customers for the parts were recorded by McGuire on January 2, 1997.
   
4. Retailers were holding $210,000 at cost ($260,000 at retail), of goods on consignment from McGuire, the consignor, at their stores on December 31, 1996.
   
5. Goods were in transit from Como to McGuire on December 31, 1996. The cost of the goods was $36,000, and they were shipped f.o.b. shipping point on December 29, 1996, was received on January 3, 1997. The freight bill was not included in the inventory or in accounts payable at December 31, 1996.
   
6. A quarterly freight bill in the amount of $4,700 specifically relating to merchandise purchases in December 1996, all of which was still in the inventory or in accounts payable at December 31, 1996.
   
7. All of the purchases from James occurred during the last seven days of the year. These items have been recorded in accounts payable and accounted for in the physical inventory at cost before discount. McGuire's policy is to pay invoices in time to take advantage of all cash discounts, adjust inventory accordingly, and record accounts payable, net of cash discounts.

    

Instructions
Prepare a schedule of adjustments to the intial amounts using the format shown below. Show the effect, if any, of each of the transactions separately and if the transactions would have no effect on the amount shown, state NONE.

	Inventory	Accounts Payable	Sales
Initial amounts	$1,240,000	$975,000	$8,600,000
Adjustments -- increase
(decrease)
1
2
3
4
5
6
7
Total adjustments
Adjusted amounts

(AICPA adapted)

solution