The following is the accounting records or Denton Company for the year ended December 31,2013. The company

The following is the accounting records or Denton Company for the year ended December 31,2013. The company is a manufacturer of tools.

Physical count of inventory at December 31,2013 was $1,520,000

Accounts payable at December 31, 2013 was $1,200,000

Sales less sales returns (Net Sales) for 2013 was $8,150,000

Additional information is below:

i. Included in the physical count were tools billed to a customer f.o.b. shipping point on December 31, 2013. These tools had a cost o $31,000 and were billed at $40,000. The shipment hasn’t been picked up by the shipper.

ii. Denton received an invoice from a vendor for goods that shipped f.o.b shipping point on December 28,2013. The invoice total was $76,000.

iii. On December 30,2013, work in process inventory that cost $30,000 was outsourxed for further processing.

iv. On December 31,2013, Denton received tools returned by customers. The tools are held pending inspection in the returned goods are and were not included in the year-end physical count. On January 8,2014, the tools that cost $32,000 were inspected and returned to inventory.  On same date, credit memos of $47,000 were issued to the customers.

v. As of December 31,2013 tools shipped to a customer f.o.b destination on December 26,2013 were still in transit. The cost of the tools was $26,000. The customer received the goods on January 2,2014 and Denton Company issued a sales invoice for $42,000 on that date.

vi. Tools that cost $27,000 were received from a vendor by the close of business on December 31,2013. However, they were not recorded on a receiving report until January 2, 2014. Therefore, the tools were not included in the December 31,2013’s physical count. The invoice came with the tools and the invoice was included in accounts payable at December 31,2013. 

vii. Goods received from a vendor on December 26,2013 were included in the physical count. However, the $56,000 vendor invoice for the goods was not included in accounts payable at December 31,2013 because accounts payable’s copy of the receiving report was lost.

viii. On January 3, 2014, December’s shipping bill for $8,000 was received. One-half of the associated inventory was included in the December 31,2013’s inventory count. The freight charges were not included in the inventory or in the accounts payable at December 31,2013.

Required:

Prepare a schedule of adjustments to the initial amounts using the format below. Show separately the effect, if any, of each of the transactions on the December 31,2013, amounts. If the transactions would have no effect on the initial amount shown, state none.

InventoryAccounts PayableNet Sales

Initial amounts$1,520,000$1,200,000$8,150,000

Adjustments (increase or decrease):

i.

ii.

iii.

iv.

v.

vi.

vii

viii.

Total adjustments

Adjusted amounts