You are auditing Marthas Prison Clothes, Inc., as of December 31, 2014. The inventory for orange jumpsuits
Question:
You are auditing Martha’s Prison Clothes, Inc., as of December 31, 2014. The inventory for orange jumpsuits shows 1,263 suits at $782 for a total of $987,666. When you look at the invoices for the jumpsuits, you see the following:
Inventory Number | Date | Quantity | Unit Price | Total | ||
12732 | 11/22/13 | 1,000 | $ | 765 | $ | 765,000 |
12844 | 12/03/13 | 800 | 777 | 621,600 | ||
12905 | 12/28/13 | 600 | 782 | 469,200 | ||
Required: |
a. | Determine the adjusting entry, if any, for the cost of inventory at December 31, 2014. (In cases where no entry is required, please select the option "No adjusting journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) |
General journal | Debit | Credit |
Cost of goods sold | 3315 | |
Inventory | 3315 | |
b-1. | Would your answer to part (a) be different if you saw an invoice dated January 9, 2015, for 500 suits at $750? |
|
b-2. | If yes, determine the adjusting entry. (In cases where no entry is required, please select the option "No adjusting journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) |
General Journal | Debit | Credit |
WHAT WOULD THE ADJUSTING JOURNAL ENTRY BE? | ||
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws