Reference no: EM132998266
Sapphire Ltd's ending inventory was assigned a cost of $55 200 by way of a physical inventory count on 31 December 2019. An audit of the company's records revealed the following information. Ignore GST.
1. Sapphire Ltd had recorded a $4500 invoice from a supplier for goods shipped EXW on 26 December 2019. The goods were not included in the physical inventory count because they had not yet arrived.
2. Sapphire Ltd had recorded a $2000 tax invoice from a supplier for goods shipped DDP on 28 December 2019. The goods were not included in the physical inventory count because they had not yet arrived.
3. Sapphire Ltd had goods valued at $6400 out on consignment on 31 December 2019 that were not included in the physical inventory count.
4. Sapphire Ltd also acts as a consignee. Consigned goods on hand on 31 December 2019 totalled $6100, and were included in the physical inventory count.
5. Sapphire Ltd purchased goods worth $5500, which were received on 30 December 2019 and included in the physical inventory count. The invoice from the supplier was not recorded until January. CHAPTER 13 Inventories 609
6. Sapphire Ltd sold goods costing $800 for $1200 on 27 December 2019, DDP. The buyer received the goods on 5 January 2020. The sale was on credit and was recorded in 2019, and the goods were excluded from the physical inventory count.
Required
Problem (a) For each of the above, determine the effects on Sapphire Ltd's 31 December 2019 account balances.
Problem (b) What is the correct ending inventory?