Failure to Record Inventory Purchases and Inventory
Refer to Practice 20 12. Assume that in addition to failing to record the purchase, the company also failed to include the inventory in the ending inventory count. Make the correcting entry necessary the following May, assuming that the company uses (1) the periodic inventory method and (2) the perpetual inventory method. Ignore income taxes.
Practice 20 12
Failure to Record Inventory Purchases
The company purchased inventory for $10,000 on December 28. The inventory purchase was not recorded until the following January 5. However, the inventory was appropriately included in the inventory count on December 31. The error was not discovered until the following May when the books for the preceding year had already been closed. Make the correcting entry necessary the following May, assuming that the company uses (1) the periodic inventory method and (2) the perpetual inventory method. Ignore income taxes.