Werth company asks you to review its december 31 2010, Ask an Expert

Accounting

Werth Company asks you to review its December 31, 2010 inventory values and prepare the necessary adjustments to the books. The following information is given to you.

•Werth uses the periodic method of recording inventory. A physical count reveals $234,890 of inventory on hand at December 31, 2010.

•Not included in the physical count of inventory is $10,420 of merchandise purchase on December 15 from Browser. This merchandise was shipped f.o.b. shipping point on December 29 and arrived in January. The invoice arrived and was recorded on December 31.

•Included in inventory is merchandise sold to Bubby on December 30, f.o.b. destination. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale on account for $12,800 on December 31. The merchandise cost $7,350, and Bubby received it on January 3.

•Included in inventory is merchandise received from Dudley on December 31, with an invoice price of $15,630. The merchandise was shipped f.o.b. destination. The invoice, which has not yet arrived, has not been recorded.

•Not included in inventory is $8,540 of merchandise purchased from Minsky Industries. This merchandise was received on December 31 after the inventory had been counted. The invoice was received and recorded on December 30. Determine the proper inventory balance for Werth Company at December 31, 2010.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9980839

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