PROBLEM 8-3 - PROBLEM 8-3 Initial amounts Adjustments: 1....

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PROBLEM 8-3 Zoe Limited Schedule of Adjustments December 31, 2010 Inventory Accounts Payable Net Sales Initial amounts $1,720,000 $1,300,000 $8,550,000 Adjustments: 1. NONE NONE (57,000) 2. 51,000 51,000 NONE 3. 38,000 NONE NONE 4. 38,000 NONE (48,000) 5. 21,000 NONE NONE 6. 27,000 NONE NONE 7. NONE 56,000 NONE 8. 3,500 7,000 NONE Total adjustments 178,500 114,000 (105,000 ) Adjusted amounts $1,898,500 $1,414,000 $8,445,000 1. The $37,000 of tools on the loading dock was properly included in the physical count. The sale should not be recorded until the goods are picked up by the common carrier. Therefore, no adjustment is made to inventory, but sales must be reduced by the $57,000 billing price. 2. The $51,000 of goods in transit from a vendor to Zoe was shipped f.o.b. shipping point on 12/29/10. Title passes to the buyer as soon as goods are delivered to the common carrier when sold f.o.b. shipping point. Therefore, these goods are properly includable in Zoe’s inventory and accounts payable at 12/31/10. Both inventory and accounts payable must be increased by $51,000.
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This note was uploaded on 12/18/2011 for the course BUSINESS 450 taught by Professor Smith during the Winter '10 term at Ryerson.

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PROBLEM 8-3 - PROBLEM 8-3 Initial amounts Adjustments: 1....

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