ABC Co. is having its inventory cut-off on December 31, 20×1. The following information is gathered for this purpose:
a) The inventory count sheet shows total inventory of $500,000 while the ledger shows a balance of $120,000 in accounts payable .
b) Not included in physical count is a shipment of inventory to a customer on December 30, 20×1 amounting to $60,000. The sale is FOB destination. The customer received the shipment on January 3, 20×2.
c) Included in the physical count and accounts payable is inventory costing $80,000 purchased from a supplier under FOB destination. This is indicated in the count sheet as “in-transit.”
d) Not included in the count and in the records is a purchase of inventory costing $50,000 form a supplier on December 31, 20×1. the shipping term is FOB shipping point. The supplier shipped the goods on December 31,20×1. ABC Co. received the shipment on January 2, 20×2.
e) Not included in the count is inventory costing $30,000. Investigation shows that the inventory is ordered by a customer on December 31,20×1. The sale term is FOB shipping point. The inventory is shipped and the customer is billed on January 2, 20×2.
Requirement: Compute for the Adjusted balances of inventory and accounts payable on December 31,20×1.
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