Seemore Lens Company (SLC) manufactures and sells contact lenses. For the year e
ID: 2468417 • Letter: S
Question
Seemore Lens Company (SLC) manufactures and sells contact lenses. For the year ended December 31, the company reported Inventory of $71,000 and Cost of Goods Sold of $422,000. a. Included in Inventory (and Accounts Payable) are $10,200 of lenses held on consignment. b. Included in the Inventory balance are $5,100 of office supplies held in SLC’s warehouse. c. Excluded from the Inventory balance are $8,100 of lenses in the warehouse, ready to send to customers on January 1. SLC reported these lenses as sold on December 31, at a price of $15,200. d. Included in the Inventory balance are $3,050 of lenses that were damaged in December and will be scrapped in January, with no recoverable value. Required: For each item, (a–d), prepare the journal entry to correct the balances presently reported.
Explanation / Answer
Seemore Lens Company All Amounts in $ Journal Entries (a) Goods on Consignment A/c 10200 To Inventory A/c 10200 (b) Office Supplies A/c 5100 To Inventory A/c 5100 (c) Inventory A/c 8100 To Cost of Goods Sold A/c 8100 Accounts Receivable A/c 15200 To Sales A/c 15200 (d) Scrap Inventory A/c 3050 To Inventory A/c 3050