When tracing using the cutoff information from the December 31 inventory cutoff

Question

When tracing using the cutoff information from the December 31 inventory cutoff of Thermo-Tempur Mattresses, you note the following information: Receiving Report Number: 1179, 1180, 1181, 1182, 1183, 1184, 1185. Date Received: 12/28, 12/28, 12/29, 12/31, 12/31, 1/2, 1/3. Total Cost: $12,433.61, $8,923.34, $15,448.22, $14,109.33, $11,482.57, $17,852.56, $8,753.95. The purchases list shows that the following items were recorded in December: Receiving Report Number: 1179, 1180, 1181, 1182, 1184. Date Received: 12/28, 12/28, 12/29, 12/31, 1/2. Total Cost: $12,433.61, $8,923.34, $15,448.22, $14,109.33, $17,852.56. The documentation indicates that the last receiving report included in the inventory count was Receiving Report 1182. Receiving Reports 1183 and 1184 were for goods received on the company's truck but not unloaded. Receiving report 1185 was for good received on January 3. Prepare a correcting journal entry assuming that Thermo-Tempur uses (a) a periodic inventory system and (b) a perpetual inventory system that was updated for the inventory count.

Explanation / Answer

As per Receiving Report As per Purchases list 28-Dec 1179 12433.61 12433.61 28-Dec 1180 8923.34 8923.34 29-Dec 1181 15488.22 15488.22 31-Dec 1182 14109.33 14109.33 31-Dec 1183 11482.57 62437.07 02-Jan 1184 17852.56 17852.56 03-Jan 1185 8753.95 Under-perpetual Inventory system Receiving Report No.1183 must be included for 31/12 cut-off figures Correcting JE will be Inventory 11482.57 Accounts payables 11482.57 (Inventory recd. Not yet recorded) Accounts payables 17852.56 Inventory 17852.56 (Reversal of inventory recorded pertaining to the next period) Under-periodic Inventory system Inventory 62437.07 Purchases 62437.07 (Inventory as per Recg. Reports 1179-1183 recorded)

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