Reagan Corporation is a wholesale distributor of truck replacement parts. Initial amounts taken from Reagan's records are as follows: Inventory

Question:

Reagan Corporation is a wholesale distributor of truck replacement parts.

Initial amounts taken from Reagan's records are as follows:

Inventory at December 31 (based on a physical count of goods in Reagan's warehouse on December 31)  $1,440,000

Accounts payable at December 31:

Reagan Corporation is a wholesale distributor of truck replacement parts.


Additional Information:

1. Parts held by Reagan on consignment from Charlie, amounting to $250,000, were count of goods in Reagan's warehouse and in accounts payable at December 31. Physical count of goods in Reagan's warehouse and in accounts payable at December 31.

2. Parts totaling $41,000, which were purchased from Full and paid for in December, were sold in the last week of the year and appropriately recorded as sales of $47,000. The parts were included in the physical count of goods in Reagan's warehouse on December 31 because the parts were on the loading dock waiting to be picked up by customers.

3. Parts in transit on December 31 to customers, shipped f.o.b. shipping point on December 28, amounted to $72,000. The customers received the parts on January 6 of the following year. Sales of $78,000 to the customers for the parts were recorded by Reagan on January 2.

4. Retailers were holding goods on consignment from Reagan, which had a cost of $400,000 and a retail value of $440,000.

5. Goods were in transit from Greg to Reagan on December 31. The cost of the goods was $44,000, and They were shipped f.o.b. shipping point on December 29.
6. A freight bill in the amount of $3,900 specifically relating to merchandise purchased in December, all of which was still in the inventory at December 31, was received on January 3. The freight bill was not included in either the inventory or in accounts payable at December 31.

7. All the purchases from Baker occurred during the last seven days of the year. These items have been recorded in accounts payable and accounted for in the physical inventory at cost before discount. Reagan's policy is to pay invoices in time to take advantage of all discounts, adjust inventory accordingly, and record accounts payable net of discounts.

Required:
Complete the schedule of adjustments to the initial amounts which is shown below initial amounts which is shown below.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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Related Book For  answer-question

Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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Question Posted: May 06, 2013 05:26:59