Question

were shipped fob destination on december 28 and did not arrive at crane warehouse until january 3. 3. included in the inventory account was $4,000 of office supplies that were stored in the warehouse and were to be used by the company’s supervisors and managers during the coming year. 4. the company received an order on december 29 that was boxed and sitting on the loading dock awaiting pick - up on december 31. the shipper picked up the goods on january 1 and delivered them on january 6. the shipping terms were fob shipping point. the goods had a selling price of $30,000 and a cost of $18,000. the goods were not included in the count because they were sitting on the dock. 5. on december 29, crane shipped goods with a selling price of $70,000 and a cost of $50,000 to macchia sales corporation fob shipping point. the goods arrived on january 3. macchia had only ordered goods with a selling price of $10,000 and a cost of $8,000. however, a sales manager at crane had authorized the shipment and said that if macchia wanted to ship the goods back next week, it could. 6. included in the count was $30,000 of goods that were parts for a machine that the company no longer made. given the high - tech nature of crane’s products, it was unlikely that these obsolete parts had any other use. however, management would prefer to keep them on the books at cost, “since that is what we paid for them, after all.” correct inventory

Explanation:

Step1: Adjust for office supplies

Inventory adjustment: $-4000$

Step2: Adjust for FOB shipping point goods

Inventory adjustment: $+18000$

Step3: Adjust for unauthorized shipment

Since the extra shipped goods (cost $50000 - 8000 = 42000$) were not ordered, they should be added back to inventory: $+42000$

Step4: Adjust for obsolete parts

Obsolete parts with no use should be removed from inventory: $-30000$

Step5: Sum adjustments (assuming starting inventory is adjusted by these values; to find correct inventory, we apply all adjustments to the unadjusted count. Let's assume unadjusted inventory is the base, and we compute net adjustment first)

Net adjustment: $-4000 + 18000 + 42000 - 30000 = 26000$
(Note: If we assume the unadjusted inventory was the count before these corrections, the correct inventory is unadjusted inventory + 26000. But since the unadjusted inventory value is not provided, we present the net adjustment and note that correct inventory = unadjusted inventory + 26000. However, based on the problem structure, we calculate the total adjustment impact)

Answer:

The net adjustment to inventory is $\$26000$. If the unadjusted inventory value is known, add $\$26000$ to it to get the correct inventory.

• Adjustment for item 5: $\$+42000$
• Adjustment for item 6: $\$-30000$

Total correct inventory adjustment: $\$26000$ (added to unadjusted inventory)