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E7-2 Determining the Correct Inventory Balance [LO 7-1, LO...

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Accounting

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E7-2 Determining the Correct Inventory Balance [LO 7-1, LO 7-2, LO 7-4] Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year ended December 31, the company reported Inventory of $84,000 and Cost of Goods Sold of $448,000. a. Included in Inventory (and Accounts Payable) are $12,800 of lenses held on consignment b. Included in the Inventory balance are $6,400 of office supplies held in SLC's warehouse. c. Excluded from the Inventory balance are $9,400 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 $17,800. d. Included in the Inventory balance are $3,700 of lenses that were damaged in December and will be scrapped in January, with no recoverable value. Required: Prepare the table showing the balances presently reported for Inventory and Cost of Goods Sold, and then displaying the adjustment(s) needed to correctly account for each of items (a)-(d), and finally determining the appropriate Inventory and Cost of Goods Sold balances. (Enter any decreases to account balances with a minus sign.) Inventory Cost of Goods Sold Present Balance a. b. C. d. Appropriate Balance 0

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