question archive You are engaged to perform an audit of the accounts of Cute Company for the year ended December 31, 2009 and have observed the taking of the physical inventory of the company on December 30, 2009
You are engaged to perform an audit of the accounts of Cute Company for the year ended December 31, 2009 and have observed the taking of the physical inventory of the company on December 30, 2009
Subject:AccountingPrice: Bought3
You are engaged to perform an audit of the accounts of Cute Company for the year ended
December 31, 2009 and have observed the taking of the physical inventory of the company on
December 30, 2009. Only merchandise shipped by the company to customers up to and including
December 30, 2009 have been eliminated from inventory. The inventory, as determined by
physical inventory count, has been recorded on the books by the company's controller. No
perpetual inventory records are maintained. All sales are made on an FOB shipping point basis.
You are to assume that purchase invoices have been correctly recorded. The inventory was
recorded through the cost of sales method.
The following lists of sales invoices are entered in the sales book for the months of December,
2009 and January, 2010, respectively.
December, 2009 Date
Sales Invoice Amount Sales Invoice Date Cost of Merchandise Sold Shipped
a) P 60,000 Dec. 21 P 40,000 Dec. 31
b) 40,000 Dec. 31 16,000 Nov. 3
c) 20,000 Dec. 29 12,000 Dec. 30
d) 80,000 Dec. 31 48,000 Jan. 3
e) 200,000 Dec. 30 112,000 Dec. 29
(shipped to consignee)
January, 2010
f) 120,000 Dec. 31 80,000 Dec. 30
g) 80,000 Jan. 2 46,000 Jan. 2
h) 160,000 Jan. 3 110,000 Dec. 31
Required:
Record the necessary adjusting journal entries at December 31, 2009 in connection with
foregoing data.
