Question

Email re: Full Company Purchase Email re: Inventory Errors Email re: Consignment goods To: Kim Ritter, Accounting Manager, Allen To: Seth Valve, Staff Accountant, Allen Company To: Company Kim Ritter, Accounting Manager, Allen Company From: Kim Ritter, Accounting Manager, Allen Company From: Lori Nash, Inventory Manager, Allen Company From: Lori Nash, Inventory Manager, Allen Company Date: Date: January 16, Year 6 January 10, Year 6 Re: Re: Date: Inventory Errors January 5, Year 6 Consignment Goods Seth, Kim, Re: Full Company Purchase Kim, I have been receiving emails regarding the inventory Near the end of the last calendar year, we engaged with Charlie valuation for the past couple of weeks now. It has come Company to hold some of their inventory on consignment. The We purchased parts from Full Company for a total of $22,000 and the invoice was paid in full to my attention that our inventory balances are likely parts held on consignment from Charlie Company to us on December 15, Year 5. Despite the slow misstated due to some errors related to the physical amounted to $155,000. These parts were included in the physical down in sales due to the holiday season, we count of inventory on December 31, Year 5. As soon as count of goods in our warehouse on December 31, Year 5, as well you are able, I will need you to look through each of the as in accounts payable at that date. were able to sell all of the parts on December 29, Year 5. The sale of these goods was emails and determine whether any major accounts Let me know there is anything else that I can help you with appropriately recorded as sales of $28,000. should be adjusted and, if so, by what amount. Hopefully the errors aren't too egregious, but let know if you come Sincerely, Cordially, across any serious issues. Lori Lori Sincerely, Kim Email re: FOB Shipping Point To: Email re: Sale to Marsela & Son Kim Ritter, Accounting Manager, Allen Company From: Lori Nash, Inventory Manager, Allen Company Date: To: Lori Nash, Inventory Manager, Allen Company January 9, Year 6 Re: From: Paul Trenton, Warehouse Manager, Allen Company FOB Shipping Point Date: January 4, Year 6 Re: Sale to Marsela & Son As of December 31, Year 5, we had parts in transit to customers, shipped FOB shipping point on December 28, Year 5. Lori, The total value of these parts in transit was $34,000. These parts were excluded from the physical count of inventory It has come to my attention that the parts sold to Marsela & Son on December 29, in our warehouse on December 31, Year 5. Year 5, were not picked up by the customer until January 3, Year 6. The parts were I have just received confirmation that all of these customers received the parts on January 6, Year 6. Sales of $40,000 purchased from Full Company and were included in inventory on December 31, were recorded on January 7, Year 6. Year 5. Let me know if there is anything more that I can do to help! Regards, Sincerely, Paul Lori Kim,

The Allen Company is a wholesale distributor of automotive replacement parts. Use the information provided in the exhibits to determine if any adjustments are needed on Allen's inventory, accounts payable, and sales. Enter the appropriate amounts in the associated cells. Indicate negative numbers by using a leading minus (-) sign. Round all amounts to the nearest whole number. If no entry is necessary, enter a zero (0) or leave the cell blank.

Transactions	Physical inventory	Accounts payable	Sales
1-3. Charlie Company consignment
4-6. Full Company parts sale
7-9. Parts in transit on December 31, Year 5, to customers

Answer 1

Answer:-

	Inventory	Accounts Payable	Sales
Initial amounts Adjustments: Increase (decrease) 1. 2. 3. 4. 5. 6. 7.  ($265,000 x 2%) Total adjustments Adjusted amounts	$1,250,000    (155,000)      (22,000)        None      210,000        25,000          2,000        (5,300)        54,700 $1,304,700	$1,000,000    (155,000)         None         None         None        25,000          2,000        (5,300)    (133,300) $   866,700	$9,000,000         None         None        40,000         None         None         None         None          40,000 $9,040,000