All one question, just screenshots from Part 1 and 2. The December 31, 2018, inv

Question

All one question, just screenshots from Part 1 and 2.

The December 31, 2018, inventory of Tog Company, based on a physical count, was determined to be $457,000. Included in that count was a shipment of goods received from a supplier at the end of the month that cost $57,000. The purchase was recorded and paid for in 2019. Another supplier shipment costing $23,500 was correctly recorded as a purchase in 2018. However, the merchandise, shipped FOB shipping point, was not received until 2019 and was incorrectly omitted from the physical count. A third purchase, shipped from a supplier FOB shipping point on December 28, 2018, did not arrive until January 3, 2019. The merchandise, which cost $87,000, was not included in the physical count and the purchase has not yet been recorded.

The company uses a periodic inventory system.

Required:
1. Determine the correct December 31, 2018, inventory balance and, assuming that the errors were discovered after the 2018 financial statements were issued, analyze the effect of the errors on 2018 cost of goods sold, net income, and retained earnings. (Ignore income taxes.)
2. Prepare a journal entry to correct the errors.

Chapter 09 Homework Help Save &Exit; Submit Check my work Ihe December 31, 2018,inventory of Tog Company, based on a physical count, was detenmined to be $45 000. Included in that count was a shipment of goods receved from a supplier at the end of the marith that cost $57,000. The purchase was recorded arid pa: for n 209 Another supplier shipment costing $23,500 was correctly recorded as a purchase in 2018. However, the merchandise. shipped FOR shipping paint, was nat receved unt 20 and was Incorrecrly omitted from the physiral count A third purchnsc 15 lipped fruiri d supplierODtipping port on Decenibel 2B. 2018, did nul dInve Lnt! Jdnudly J. 2019. Thernerchdldise, which cost 87000, was not Included In the physical count and the purchase has not yet been recorded. The company uses a penodic inventory system. Required: 1. Uetemine the correct Uecember 31, 2018. inventory Oalance and, assuming that te erros were scovered atter the 2018 financ starements were ssued, analyze the effect of the errors cam 201 cost of goods seld, net mcorme, and retained earnings. Ignore income taxes. 2. Prepare aournal entry to correct the erTors Complete this question by enteriny your answers in the tobs below. Required Rquirad 2 Determine the correct December 31, 2018, inventory belance and, assuming that the errors were discovered after the 2029 tinandal stataments wara issued, analyza tha aect the arrars an 2018 cast at gcods sold, net income, and ratained Correct ending inventury Cazt cf goodz ld Nat ircome Requirad1 Reference links

Explanation / Answer

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Req 1 December 31, 2018 inventory, based on a physical count $      457,000 Add: Merchandise shipped f.o.b. shipping point in 2018            23,500 Merchandise shipped f.o.b. shipping point in 2018            87,000 Correct ending inventory $      567,500 Analysis: U = Understated O = Overstated 2018 Beginning inventory Plus: Net purchases U-144,000 ($57,000 + 87,000) Less: Ending inventory U-110,500 Cost of goods sold U -33,500 Revenues Less: Cost of goods sold U -33,500 Less: Other expenses Net income O -33,500 ê Retained earnings O -33,500 Req 2 Retained earnings 33,500 Inventory 110,500 Accounts payable 144,000

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