Question

im not sure if my ansers are right. please help with explanation

Rachel Warren, an auditor with Laplante CPAs, is performing a review of Schuda Company's inventory account. Schuda did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $794,030. However, the following information was not considered when determining that amount. Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number, e.g. -15,000, or parenthesis e.g. (15,000). Enter 0 if there is no effect.)

Answer 1

Hi

Attached Screen shot is carrying the solution of your problem:

Solution Particulars Ending Inventory as reported 1) Exclude - As ownership belong to Harmon Corp 2) No Correction Require - As Goods are in transit with FOB destination agreement 3) Exclude - As these are office supplies 4) Include - As goods were sitting on the dock not shipped 5) Include (57460-8790) As buyer has right to return, which was not ordered 6) Exclude - As these are Machine supplies Correct Invento Amount $ 7,94,030 $ 3,28,680 $-25,050 $ 34,340 $48,670 $-42,960 4,80,350