Seemore Lens Company (SLC) manufactures and sells contact lenses. For the year e
ID: 2473645 • Letter: S
Question
Seemore Lens Company (SLC) manufactures and sells contact lenses. For the year ended December 31, the company reported Inventory of $77,000 and Cost of Goods Sold of $434,000. journal entry for: a. Included in Inventory (and Accounts Payable) are $11,400 of lenses held on consignment. b. Included in the Inventory balance are $5,700 of office supplies held in SLC’s warehouse. c. Excluded from the Inventory balance are $8,700 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 $16,400. d. Included in the Inventory balance are $3,350 of lenses that were damaged in December and will be scrapped in January, with no recoverable value.
Explanation / Answer
Account head
Debit
Credit
a
No Inventory required for Consignment of goods, because the consigner hold the ownership of goods
b
Office supplies
5,700.00
Inventory
5,700.00
c
Inventory
8,700.00
Cost of goods sold
8,700.00
d
Cost of goods sold
3,350.00
Inventory
3,350.00
Correct Inventory balance = $77,000 - $5,100 + $8,700 - $3,350 = $76,650
Account head
Debit
Credit
a
No Inventory required for Consignment of goods, because the consigner hold the ownership of goods
b
Office supplies
5,700.00
Inventory
5,700.00
c
Inventory
8,700.00
Cost of goods sold
8,700.00
d
Cost of goods sold
3,350.00
Inventory
3,350.00