Differences between the book balance and the physical count

Assignment Help Accounting Basics
Reference no: EM13933785

Royal Sales experienced the following events during 2013, its first year of operation:

1. Started the business when it acquired $80,000 cash from the issue of common stock. 
2. Paid $35,000 cash to purchase inventory. 
3. Sold inventory costing $21,000 for $40,500 cash. 
4. Physically counted inventory showing $13,500 inventory was on hand at the end of the accounting period. 

Required: 

a. Open appropriate ledger T-accounts, and record the events in the accounts. 
b. Prepare an income statement and balance sheet for 2013. 
c. Explain how differences between the book balance and the physical count of inventory could arise. Why is being able to determine whether differences exist useful to management? 

Reference no: EM13933785

Questions Cloud

Compute the tension in the cable : The solid concrete cylinder 6 ft long and 4 ft in diameter is supported in a half-submerged position in fresh water by a cable which passes over a fixed pulley at A. Compute the tension T in the cable. The cylinder is waterproofed by a plastic coa..
Discuss how pvrs will affect the demand : Discuss how PVRs will affect the demand from advertisers (i.e., to place advertisements in network television programs).
Is the distribution the same as reported in the newspaper : Credit Union Loans USA TODAY reported that 21% of loans granted by credit unions were for home mortgages. At a = 0.05, is the distribution the same as reported in the newspaper?
How would you describe the process of thinking : As a parent of a young child, you are concerned about giving your child a head start. Which theory - Piaget's or Vygotsky's - do you like the best? Why? Based on your choice of theory, what type of activities/tools would you choose to make availab..
Differences between the book balance and the physical count : Explain how differences between the book balance and the physical count of inventory could arise. Why is being able to determine whether differences exist useful to management?
What is the role of congress in the policymaking process : Write one paragraph for the following question. what is the role of Congress in the policymaking process?
Patient protection and affordable care act of 2010 : Describe 2 most significant changes will bring to US healthcare landscape from Patient Protection and Affordable Care Act of 2010.
Explain (a)the origins of the professional standard : Explain (a)the origins of the professional standard of care and (b)the two key evidentiary elements of the standard as it was first developed .
Exchange rate and employment levels : Explain how monetary policy can influence an economy, including the exchange rate and employment levels.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Panarude airfreight is an international air freight hauler

panarude airfreight is an international air freight hauler with more than 45 jet aircraft operating in the united

  Why is it important to properly classify liabilities

Why is it important to properly classify liabilities? Discuss ways in which misclassification would impact the financial statements. Discuss ways in which misclassification would impact financial analysis. How would this affect shareholders and..

  Topper corporation has 80000 shares of 1 par value common

topper corporation has 80000 shares of 1 par value common stock and 52000 shares of cumulative 6.6 100 par preferred

  Prepare the journal entry to record the issuance

On January 1, 2010, Lauren Corporation issued $40,000, 9%, ten-year bonds payable at 108. Interest is payable each December 31.

  Balance in retained earnings equals

A company had a beginning balance in retained earnings of $43,000. It had net income of $6,000 and paid out cash dividends of $5,625 in the current period. The ending balance in retained earnings equals:

  Equipment costing 20000 with a salvage value of 4000 and an

equipment costing 20000 with a salvage value of 4000 and an estimated life of 8 years has been depreciated using the

  Because of chronic water shortage in santa fe new athletic

because of chronic water shortage in santa fe new athletic fields must use artificial turf or xeriscape landscaping.

  What the amount and character of the gain or loss

Peg sold a machine this year for $48,000. Peg purchased the same machine for $53,000 a couple years ago and claimed a total of $11,500 of depreciation expense on the machine. What's the amount and character of the gain or loss?

  Prepare complete multiple step income statement for company

Prepare a complete multiple step income statement for the company (showing both gross profit and income from operations).

  On january 1 year 6 the corporation issued 1000000 face

on january 1 year 6 the corporation issued 1000000 face value 20-year bonds. the bonds carry coupon interest of 6

  Compute the effect of this error on net income for 2012 and

lagreca company uses the lower of cost or market method on an individual-item basis in pricing its inventory items. the

  When the cost behavior pattern has been identified as fixed

When the cost behavior pattern has been identified as fixed at a certain volume of activity.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd