You are assigned to audit PT Kimia Sentosa for the year ended December 31, 2003. PT Kimia
Question:
You are assigned to audit PT Kimia Sentosa for the year ended December 31, 2003. PT Kimia Sentosa is engaged in wholesale and chemical sales and sells its products 25% above cost. The following is a breakdown of sales that occurred and were recorded during the month of December 2003:
Details for purchases that have occurred and have been recorded in December 2003 are:
The company records its inventory using a perpetual method.
You have observed the physical inventory count on December 31, 2003 and are satisfied that the calculations were carried out as appropriate. In addition, additional information was obtained as follows:
Required:
Make an adjusting entry to be made at the end of the year in connection with the above data against the inventory account and related accounts, by assuming that the error exceeds the acceptable level of error (torable error).
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso