The records of Thomas Company as of December 31, 2014, show the following: The accountant of Thomas

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The records of Thomas Company as of December 31, 2014, show the following:
The records of Thomas Company as of December 31, 2014,

The accountant of Thomas Company discovers in the first week of January 2015 that the following errors were made by his staff.
a. Goods costing $4,500 were in transit (FOB shipping point) and were not included in the ending inventory. The invoice had been received and the purchase recorded.
b. Damaged goods (cost $4,100) that were being held for return to the supplier were included in inventory. The goods had been recorded as a purchase and the entry for the return of these goods had also been made.
c. Inventory items costing $3,900 were incorrectly excluded from the final inventory. These goods had not been recorded as a purchase and had not been paid for by the company.
d. Goods that were shipped FOB destination had not yet arrived and were not included in inventory. However, the invoice had arrived on December 30, 2014, and the purchase for $2,700 was recorded.
e. Goods that cost $2,400 were segregated and not included in inventory because a customer expressed an intention to buy the goods. The sale of the goods for $4,200 had been recorded in December 2014.


Required:
Using the format provided above, show the correct amount for net purchases, net income, accounts payable, and inventory for Thomas Company as at December 31, 2014.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Related Book For  book-img-for-question

Fundamental Accounting Principles

ISBN: 978-0071051507

Volume I, 14th Canadian Edition

Authors: Larson Kermit, Tilly Jensen

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