Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 5, Problem 12E
Exercise 5-12 Impacts of inventory error on key accounts P3
A retailer completed a physical count of ending merchandise inventory. When counting inventory, employees did not include S3.000 of incoming goods shipped by a supplier on December 31 under FOB shipping point. These goods had been recorded in Merchandise Inventory, but they -were not included in the physical count because they were in transit. This means shrinkage was incorrectly overstated by $3,000.
Compute the amount of overstatement or understatement for each of the following amounts for this period.
a. Ending inventory
b. Total assets C. Net income d. Total equity
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Students have asked these similar questions
Question 5
The General Ledger entry when Goods Issued is posted is
DB: Cost of Goods Sold: CR: Inventory
DB:Cost of Good Sold; CR Sales Revenue
DB: Inventory, CR: Cost of Goods Sold
DB: Sales Revenue, CR:Inventory
Question 6 (1
If the wrong item is entered into a sales order, when will the mistake be caught?
none of the answers
when the warehouse ships the order
when accounts receivable sends the invoice
when the order is received by customer
Problem 5-24A (Algo) Effect of inventory errors on financial statements LO 5-3
The following income statement was prepared for Frame Supplies for Year 1.
FRAME SUPPLIES
Income Statement
For the Year Ended December 31,
Year 1
Sales
Cost of goods sold
Gross margin
Operating expenses
Net income
30,780
(8,520)
$ 22,260
During the year-end audit, the following errors were discovered:
1. A $1,588 payment for repairs was erroneously charged to the Cost of Goods Sold account. (Assume that the
perpetual Inventory system is used.)
2. Sales to customers for $2,243 at December 31, Year 1, were recorded in the books for Year 1. Also, the $1,422
cost of goods sold was not recorded.
3. A mathematical error was made in determining ending Inventory. Ending Inventory was understated by $973. (The
Inventory account was mistakenly written down to the Cost of Goods Sold account.)
Required
Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and…
Question 9
(i) Periodic inventory system is less commonly used by companies due to:
A: the complexity in recording the sales and purchases of inventory.
B: the ban of the use by the accounting systems.
C: extra effort in performing the stock taking every month.
D: less updated information on inventory provided during the year.
(ii) Paul Company uses its periodic inventory system and you are given the following information:
Sales.... . . . . . . ........................................................$65,100
Inventory- Beginning...........................................$16,800
Inventory- Ending.... . . . . . . . . . . . . . . . . . . . .$14,700
Purchases... . . . . . . . . . . . . . . . . .................... . .$48,300
How much is the gross profit?
A: $14,700.
B: $50,400.
C: $48,300.
D: $65,100.
Chapter 5 Solutions
Fundamental Accounting Principles
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - 5. How does a company that uses a perpetual...Ch. 5 - Prob. 6DQCh. 5 - What is the difference between a sales discount...Ch. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - What is the difference between the single-step and...
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Refer to the income statement of Samsung in...Ch. 5 - Prob. 15DQCh. 5 - Applying merchandising terms C1 P1 Enter the...Ch. 5 - Identifying inventory costs C2 Costs of $5.000...Ch. 5 - Merchandise accounts and computations C2 Use the...Ch. 5 - Computing net invoice amounts P1 Compute the...Ch. 5 - Recording purchases, returns, and discounts taken...Ch. 5 - Recording purchases and discounts taken P1 Prepare...Ch. 5 - Recording purchases and discounts missed Pl...Ch. 5 - Recording sales, returns, and discounts taken P2...Ch. 5 - Accounting for shrinkage—perpetual system P3...Ch. 5 - Closing entries P3 Refer to QS 5-9 and prepare...Ch. 5 - Multiple-step income statement P4 For each item...Ch. 5 - Preparing a multiple-step income statement P4...Ch. 5 - Exercise 5-13 Physical count error and profits A2...Ch. 5 - Prob. 14QSCh. 5 - Prob. 15QSCh. 5 - Prob. 16QSCh. 5 - Recording purchases, returns, and...Ch. 5 - Recording sales. returns, and discounts—periodic &...Ch. 5 - Prob. 19QSCh. 5 - Prob. 20QSCh. 5 - Prob. 21QSCh. 5 - Prob. 22QSCh. 5 - QS 5-23 Sales transactions P2
Prepare journal...Ch. 5 - Exercise 5-1 Computing revenues, expenses, and...Ch. 5 - Prob. 2ECh. 5 - Exercise 5-3 Recording purchases, purchases...Ch. 5 - Exercise 5-4 Recording sales, sales returns, and...Ch. 5 - Exercise 5.5 Recording purchases, purchases...Ch. 5 - Exercise 5-6 Recording sales, purchases, and cash...Ch. 5 - Exercise 5-7 Recording sales, purchases, shipping,...Ch. 5 - Exercise 5-8 Inventory and cost of sales...Ch. 5 - Exercise 5-9 Recording purchases, sales, returns,...Ch. 5 - Exercise 5-10 Preparing adjusting and closing...Ch. 5 - Prob. 11ECh. 5 - Exercise 5-12 Impacts of inventory error on key...Ch. 5 - Exercise 5-13 Physical count error and profits...Ch. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - Prob. 20ECh. 5 - Prob. 21ECh. 5 - Prob. 22ECh. 5 - Prob. 23ECh. 5 - Prob. 24ECh. 5 - Prob. 25ECh. 5 - Problem 5-1A
Preparing journal entries for...Ch. 5 - Problem 5-2A
Preparing journal entries for...Ch. 5 - Problem 5-3A Computing merchandising amounts and...Ch. 5 - Problem 5-4A Preparing closing entries and...Ch. 5 - Prob. 5APSACh. 5 - Problem 5-1 B
Preparing journal entries for...Ch. 5 - Problem 5-2B
Preparing journal entries for...Ch. 5 - Problem 5-3B Computing merchandising amounts and...Ch. 5 - Problem 5-4B Preparing closing entries and...Ch. 5 - Problem 5-5B Preparing adjusting entries and...Ch. 5 - SP 5 Santana Rey created Business Solutions on...Ch. 5 - Prob. 1GLPCh. 5 - Prob. 2GLPCh. 5 - Prob. 3GLPCh. 5 - Prob. 1AACh. 5 - Key comparative figures for Apple and Google...Ch. 5 - Prob. 3AACh. 5 - Prob. 1BTNCh. 5 - Prob. 2BTNCh. 5 - Prob. 3BTNCh. 5 - Prob. 4BTNCh. 5 - Prob. 5BTNCh. 5 - Prob. 6BTN
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