E7-3 Recording Journal Entries to Correct Inventory Misreporting LO 7-1, LO 7-2,

Question

E7-3 Recording Journal Entries to Correct Inventory Misreporting LO 7-1, LO 7-2, LO 7-4] Seemore Lens Company (SLC) manufactures and sells contact lenses. For the year ended December 31, the company reported Inventory of $82,000 and Cost of Goods Sold of $444,000 a. Included in Inventory (and Accounts Payable) are $12,400 of lenses held on consignment. b. Included in the Inventory balance are $6,200 of office supplies held in SLC's warehouse c. Excluded from the Inventory balance are $9,200 of lenses in the warehouse, ready to send to customers on January 1. SLC reported these lenses as sold on December 31, at a price of $17,400 d. Included in the Inventory balance are $3,600 of lenses that were damaged in December and will be scrapped in January, with no recoverable value Required For each item, (a-d), prepare the journal entry to correct the balances presently reported. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 4 Included in Inventory (and Accounts Payable) are $12,400 of lenses held on consignment. Record the transaction Note: Enter debits before credits Transaction General Journal Debit Credit

Explanation / Answer

the following are the required journal entries:

a.

b.

c.

1st entry

2nd entry

d.

dec 31

dec 31 Accounts payable a/c $12,400 ...........To Merchandise inventory a/c $12,400 (to reverse goods held on consignment held in inventory)

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