Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year ended December 31, the company reported Inventory of $86,000 and Cost of Goods Sold of $452,000.

 

1. Included in Inventory (and Accounts Payable) are $13,200 of lenses SLC is holding on consignment.

2. Included in SLC’s Inventory balance are $6,600 of office supplies held in SLC’s warehouse.

3. Excluded from SLC’s Inventory balance are $9,600 of lenses in the warehouse, ready to send to customers on January 2. SLC reported these lenses as sold on December 31, at a price of $18,200.

4. Included in SLC’s Inventory balance are $3,800 of lenses that were damaged in December and will be scrapped in January, with zero realizable value.

 

Required:

For each item, (a)-(d), prepare the journal entry to correct the balances presently reported. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal Entry (5 parts)

1. To record the elimination of consignment inventory, which does not belong to SLC.

2. To record the rectification for recording $6,600 supplies as inventory.

3. To record the elimination of $9,600 cost of goods sold in December for a sale to be made in January.

4. To record the elimination of $9,600 cost of goods sold in December for a sale to be made in January.

5. To record the elimination of $9,600 cost of goods sold in December for a sale to be made in January.

Answer rating: 100% (QA)

1 To record the elimination of consignment inventory whic... View the full answer