073Q5 - Name_Zhi Pei 4-Digit_7688 Section_14518 Buying and...

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Name__ Zhi Pei __________________ 4-Digit #_ 7688 _______ Section_ 14518 __________ Buying and Selling Goods: [073Q5] The Naydia Company [the firm] counted inventory on hand from 1-3pm on December 31, Year 1. According to this physical count, there was $730,000 of inventory on hand at that time. The firm uses the periodic system when accounting for its inventory. In reviewing the inventory records of the firm you have discovered the following items that need to be considered when making any adjustments to the physical count and/or the accounting records for Years 1 and 2. a. The firm sold $65,000 of goods to a customer located more than 700 hundred miles from the seller’s location. These goods had a cost basis of $48,000. These goods were included in the physical count taken on December 31, Year 1. The sales invoice was mailed on January 2, Year 2, and the sale was recorded in the books that day. These goods had been sold FOB shipping point and were shipped by Naydia Company at 4.30pm on December 31, Year 1. The goods did arrive at the customer’s receiving dock on January 6, Year 2.
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