Question

Farley Bains, an auditor with Nolls CPAs, is performing a review of Sage Hill inc's Inventory account. Sage Hill inc did not have a good year, and top manager under pressure to boost reported income. According to its records, the inventory balance at year-end was $800,470. However, the following information was considered when determining that amount. Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesise-45 or parentheses e 145 Support Ending Inventory-as reported 1 Included in the company's count were goods with a cost of $248,330 that the company is holding on consignment. The goods belong to Nader Corporation 2 The physical count did not include goods purchased by Sage Hill Inc with a cost of 543,180 that were shipped FOB shipping point on December 28 and did not arrive at Sac Hill inc's warehouse until January 3

Answer 1

Answer)

Calculation of correct Inventory Amount
Particualrs				Amount($)
Ending Inventory as reported.				$800,470
1.Goods on Consignment Basis.				$248,330
2. Goods in Transit.				$43,180
Total				$1,091,980

Answer)

Caiculation of Average Cost per unit ( Perpetual Inventory System)
				Amount($)	Average Cost Per Unit
Jun-01				550
Inventory Account Balance
(110units*$5)
				550	$5
Jun-12
Purchases				2004
(334units*$6)
Closing Inventory				2554	$5.752252
Jun-15
Sales				2182
{(110units*$5)+(272units*$6)}
Closing Inventory				372	$6
(62units*$6)
Jun-23
Purchases				1421
(203units*$7)
Closing Inventory				1793	$6.7660377
{(62units*$6)+(203units*$7)}
Jun-27
Sales				318
(53Units*6)
Closing Inventory				1475	$6.9575472
{(9units*$6)+(203Units*$7)}
Jun-30
Closing Inventory				1475	$6.9575472
{(9units*$6)+(203Units*$7)}