Wildhorse Bank and Trust is considering giving Alou Company a loan. Before doing so, management decide that further discussions with Alou's accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of £290,500. Discussions with the accountant reveal the following. 1. 2. 3. 4. 5. Alou sold goods costing £38,500 to Comerico Company, FOB shipping point, on December 28. The goods are not expected to arrive at Comerico until January 12. The goods were not included in the physical inventory because they were not in the warehouse. The physical count of the inventory did not include goods costing £95,700 that were shipped to Alou FOB destination on December 27 and were still in transit at year-end. Alou received goods costing £22,600 on January 2. The goods were shipped FOB shipping point on December 26 by Grant Co. The goods were not included in the physical count. Alou sold goods costing £33,500 to Emerick Co., FOB destination, on December 30. The goods were received at Emerick on January 8. They were not included in Alous physical inventory. Alou received goods costing £42,600 on January 2 that were shipped FOB shipping point on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of £290,500. Determine the correct inventory amount on December 31. The correct inventory amount £
Wildhorse Bank and Trust is considering giving Alou Company a loan. Before doing so, management decide that further discussions with Alou's accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of £290,500. Discussions with the accountant reveal the following. 1. 2. 3. 4. 5. Alou sold goods costing £38,500 to Comerico Company, FOB shipping point, on December 28. The goods are not expected to arrive at Comerico until January 12. The goods were not included in the physical inventory because they were not in the warehouse. The physical count of the inventory did not include goods costing £95,700 that were shipped to Alou FOB destination on December 27 and were still in transit at year-end. Alou received goods costing £22,600 on January 2. The goods were shipped FOB shipping point on December 26 by Grant Co. The goods were not included in the physical count. Alou sold goods costing £33,500 to Emerick Co., FOB destination, on December 30. The goods were received at Emerick on January 8. They were not included in Alous physical inventory. Alou received goods costing £42,600 on January 2 that were shipped FOB shipping point on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of £290,500. Determine the correct inventory amount on December 31. The correct inventory amount £
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Kk.344.
Transcribed Image Text:Wildhorse Bank and Trust is considering giving Alou Company a loan. Before doing so, management decide that further discussions
with Alou's accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of
£290,500. Discussions with the accountant reveal the following.
1.
2.
3.
4.
5.
Alou sold goods costing £38,500 to Comerico Company, FOB shipping point, on December 28. The goods are not expected to
arrive at Comerico until January 12. The goods were not included in the physical inventory because they were not in the
warehouse.
The physical count of the inventory did not include goods costing £95,700 that were shipped to Alou FOB destination on
December 27 and were still in transit at year-end.
Alou received goods costing £22,600 on January 2. The goods were shipped FOB shipping point on December 26 by Grant
Co. The goods were not included in the physical count.
Alou sold goods costing £33,500 to Emerick Co., FOB destination, on December 30. The goods were received at Emerick on
January 8. They were not included in Alous physical inventory.
Alou received goods costing £42,600 on January 2 that were shipped FOB shipping point on December 29. The shipment was
a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of £290,500.
Determine the correct inventory amount on December 31.
The correct inventory amount £
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
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