Reference no: EM133015534

Question - On December 31, 2021, ABC Co. has a balance of 240,000 in its inventory account, determined through physical count, and a balance of 90,000 in its accounts payable account. The balances were determined before any necessary adjustment for the following:

a. Segregated goods in the shipping area marked "Bill and hold sale" were included in inventory because shipment was not made until January 4, 2022. The goods were sold to the customer, on a "bill and hold" sale, for 20,000 on December 30, 2021. The customer accepted the billing on that day. The cost of the goods is 10,000. The goods were already packed and ready for shipment. Both ABC and the buyer acknowledged the shipping term.

b. A package containing a product costing 80,000 was standing in the shipping area when the physical inventory was conducted. This was included in the inventory although it was marked "Hold for shipping instructions." The sale order was dated December 17, 2021 but the package was shipped and the customer was billed on January 4, 2022.

c. Merchandise costing 10,000, shipped FOB destination from a vendor on December 30, 2021, was received and recorded on January 5, 2022.

d. Goods shipped F.O.B. shipping point on December 27, 2021, from a vendor to ABC Co. were received on January 6, 2022. The invoice cost of 30,000 was recorded on December 31, 2021 and included in the count as "goods in-transit."

1. How much is the adjusted balance of inventory?

a. 160,000

b. 200,000

c. 230,000

d. 240,000

2. How much is the adjusted balance of accounts payable?

a. 60,000

b. 90,000

c. 80,000

d. 100,000

The raw materials inventory of 101 Co. on December 31, 2021 have a cost of 20,000 and an estimated net realizable value of 18,000. Information on the finished goods is as follows:

Cost 250,000

NRV 280,000

3. How much is the total inventory on December 31, 2021?

a. 268,000

b. 270,000

c. 298,000

d. 300,000