Record the necessary adjusting and correcting journal for the year ended December $31,2023$I $.$ t is very important to adhere to the company's current accounting policies regarding the

recording and valuation of inventory.

As it was the practice for many years ago, we are using the periodic inventory system to

maintain inventory records as well as valuing the year$-$end based on the lower of cost or

market value $($LCM$)$ technique.

In determining inventory cost, we use the weighted average cost flow assumption. This is to

ensure consistency of accounting treatment unless a change of accounting method is

appropriately justified.

While overlooking the area of inventory, an Inventory count shows BD $58,400$ as of year$-$

end. However, the below transactions of some goods were not considered:

a$)$ The merchandise was ordered and paid for by MANCO on Dec. $30$ and shipped on

same date but reached the customer on Jan. $1.,$ valued at BD $13,000,$ with shipping

terms FOB destination. The cash sales were correctly recorded.

b$)$ On Dec. $27,$ the company purchased goods in cash amounting to BD $11,600$ FOB

shipping point. The goods are expected to arrive on Jan. $5.$ However, purchases were

correctly recorded.

c$)$ During the physical inventory, it was found out that goods amounting to BD $2,500$

have become wet due to the recent strong rains that seeped through the

warehouse, thus, becoming damaged, and cannot be sold anymore.

d$)$ Also, the company has consigned goods with Amazing Company, a retailer who acted

as a consignee, valued at BD $10,000.$

e$)$ No material variation of market value from inventory cost was found as per assessing

LCM technique.