Prgblgm -1 IU Correcting Inventory Errors The Tilbert Corporation has adjusted and closed its books at the end of 2016. The company arrives at Its Inventory position by a physical count taken on December 31 of each year. In March 201?. the following errors were discovered; a. Merchandise that cost $7,500 was sold for $10,200 on December 30, 2015. The under was shipped December 31. 2015 with terms FOB shipping point. The merchandise was not included In the ending Inventory. The sale was recorded on January 15.2011 when the customer made payment on the sale. On January 2. 201?.1'ilbert Corporation received merchandise that had been shipped to It on December 31. 2016. The terms of the purchase were FOB shipping point Cost or the merchandise was 55.250. The purchase was recorded and the goods included In the inventory on January 2. 201?. On January 8, 201?. merchandise that had been Included in the ending inventory was returned to TIIbert Corporation because the consignee had not been able to sell. The cost of this merchandise was $3.600 with selling price of $5.400. Merchandise costing $2.250. located In a separate warehouse. was overlooked and excluded from the 2010 Inventory count. On December 27. 2016, TIIbert corporation purchased merchandise costing $3.525 from a supplier. The order was shipped December 20. terms FOE destination and was still "in-lransit' on December 31. Because the invoice was received on December 31, the purchase was recorded in 2015. The merchandise was not Included in the Inventory count. The corporation failed to make an entry for purchase on account of $2505 at the end oi 2016. although it included this merchandise in the Inventory count. The purchase was recorded when payment was made to the supplier in 201?. The corporation included in Its 2016 ending Inventory merchandise with a cost of $4,050. This merchandise had been custom built and was being held according to customers written request until the customer could come and pick up the merchandise. The sale for $5,475. was recorded In 201?. Required: Give the entry in 201? (2010 books are closed) to correct each error. Assume that the errors were made during 2016, all amounts are material. and the periodic Inventory system is used. Prgblem -2 Correcting Inventory Errors Wallstreet Co.. asks you to review its December 31. 2016. inventory values and prepare necessary adjustments to the books. The following Information Is given to you. 'I. Wallstreat Co. uses the periodic method of recording Inventory. A physical count reveals $704.6?0 of Inventory on hand at December 31. 2016. Not Included in the physical count oi Inventory is $31,260 oi merchandise purchased on December 15 from Bengor Company. This merchandise was shipped FOB shipping point on December 29 and arrived In January. The Invoice arrived and was recorded on December 31. Included in inventory is merchandise sold to Busher Company on December 30. FOB destination. This merchandise was shipped after It was counted. The invoice was prepared and recorded as a sale on account for $30.400 on December 31. The merchandise cost $22.050. and Busher Company received it on January 3. Included in inventory was merchandise received from Doom Co.. on December 31 with an invoice price of 546.000. The merchandise was shipped FOB destination. The Invoice. which has not yet arrived has not been recorded. Not Included in inventory is $25620 of merchandise purchased from Molly Inc. This merchandise was received on December 31 after the inventory had been counted. The invoice was received and recorded on December 30. Included in inventory was 531.314 of Inventory held by Wallstreet Co.. on consignment from Jack Corporation. Included in inventory is merchandise sold to Simon Co.. FOB shipping point. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale for $50200 on December 31. The cost of this merchandise was $34,500. and Simon Co.. received the merchandise on January 5. Excluded from inventory was a carton labeled \"Please accept for credit". This carton contains merchandise costing $4,500 which had been sold to a customer for $1000. No entry had been made to the books to reect the return. but none of the returned merchandise seemed damaged. Required: a. Compute the correct Inventory balance for Wallstreet Co.. at December 31. 2016. b. Prepare any correcting entries to adjust inventory and related accounts to their proper amounts at December 31. 2016. Assume the books have not been ciosed. Problem 3-3 Computation of Adjusted Sales and Inventories In testing the sales cut-off for the Big Bang Company in connection with an audit for the year ended October 31, 2016, you find the following information: A physical inventory was taken as of the close of business on October 31, 2016. All customers are within a three-day delivery area of the company's plant. The unadjusted balances of Sales and Inventories are $7,500,000 and $330,000, respectively. Invoice Date Date Numbe FOB Terms Shippe Recorded Sales Cost 6671 Destination Oct. 20 Oct. 31 $ 3.000 $ 2.700 6672 Shipping point Oct.31 Nov. 2 7.500 6.000 6673 Shipping point Oct. 25 Oct. 31 5.400 3.600 6674 Destination Oct. 31 Oct. 29 12.600 9.300 6675 Destination Oct. 31 Nov. 2 27.600 24.000 6676 Shipping point Nov. 2 Oct. 23 19.500 15.300 6677 Shipping point Nov. 5 Nov. 6 22.500 17.400 6678 Destination Oct. 25 Nov. 3 11.700 6.000 6679 Shipping point Nov. 4 Oct. 31 25.800 24.600 6680 Destination Nov. 5 Nov. 2 15.000 12.000 Required: Bases on the foregoing information, compute the October 31, 2016 adjusted balances of the following accounts: (a) Sales (b) Inventories Problem 3-4 Cut-off Test for Purchases You are conducting a financial statement audit of the of Beckerly Company for the year ended December 31, 2016. You have observed the taking of physical inventory and have noted that all merchandise actually received up to the close of business on December 28, 2016, has been recorded on the inventory sheets. The total invoice cost of the items included in the physical count is $300,000. The following purchases invoices have been recorded in the Purchases Journal as follows: December 2016 Invoice Invoice Date Number Amount Date FOB Term Received 251 ### Dec. 23 Destination Dec. 24 252 8.136 Dec. 23 Destination Dec. 29 253 3.123 Dec. 26 Shipping point Dec. 30 254 12.600 Dec. 26 Shipping point Jan. 5 255 13.833 Jan. 2 Destination Dec. 31 256 6.309 Dec. 31 Destination Jan. 4 257 3.486 Dec. 27 Shipping point Dec. 21 258 21.162 Jan. 8 Shipping point Jan. 2 259 34.866 Dec. 22 Destination Dec. 28 260 11.331 Dec. 28 Destination Dec. 27 January 2017 261 $ 3.672 Dec. 28 Destination Jan. 4 262 11.391 Dec. 30 Destination Dec. 28 263 17.712 Dec. 29 Shipping point Dec. 31 264 14.700 Jan. 2 Shipping point Jan. 5 265 41.400 Dec. 28 Shipping point Jan. 4 266 17.877 Dec. 30 Destination Jan. 6 Required: 1. Auditor's adjusting entries, if any, required by the above information. 2. Show the detailed composition of the value of the inventory to be used on the financial statements. Transportation-in charges on purchases average 6% during the year and are to be included in the inventory valuation