60.1K

Verified Solution

Link Copied!

4) Forest Youth Group Company (FYG) has taken a physical count of its inventory at October 31, its fiscal year-end. After reviewing the accounting records and documentation, the following items have been discovered: (a) An invoice from Shreck Co. indicates that $6,000 of games were shipped to FYG on October 27, terms FOB shipping point. The games and invoice did not arrive at FYG until September 2 and were not included in the physical count. (b) An invoice from Gamers, Inc. indicates that $8,000 of games were shipped to FYG on October 29 , terms FOB destination. The games and invoice did not arrive at FYG until September 2 and were not included in the physical count. The physical count and cost assignment on October 31 prior to these two items is $35,000. The cost of goods sold for FYG is $210,000. 1. Calculate the amount that should be reported as ending inventory for FYG. 2. Calculate the days' sales in inventory before and after the appropriate adjustments for inventory. a. Sold $30,500 of merchandise (that cost $17,850 ) to customers on credit. b. Received $39,510 cash in payment of accounts receivable. c. Wrote off $1,570 of uncollectible accounts receivable. d. In adjusting the accounts on October 31 , its fiscal year-end, the company estimated that 4.0% of accounts receivable will be uncollectible

Answer & Explanation Solved by verified expert

See Answer