Logan Company Has Provided the Following Information

question 57

Essay

Logan Company has provided the following information:
1) Included in the physical count were inventory items billed to a customer FOB shipping point on December 31, 2016. The goods had a cost of $280 and had been billed at $400. The shipment was on Logan's loading dock waiting to be picked up by the trucking company.
2) Goods returned by customers and held pending inspection in the returned goods area on December 31, 2016, were not included in the physical count. On January 5, 2017, the goods costing $260 were inspected and returned to inventory. Credit memos totaling $380 were issued to the customers on the same date.
3) On January 3, 2017, a monthly freight bill in the amount of $170 was received. The bill specifically related to merchandise purchased in December 2016, 30% of which was still in inventory at December 31, 2016. The freight charges had not been recorded at December 31, 2016.
4) Goods were shipped out on consignment on December 15, 2016, and were recorded as a sale at the sales price of $550. The consignee has not yet sold these items. Goods are sold at a markup of 10% on cost. The goods were not included in inventory.
Required:
Logan's unadjusted balances on December 31, 2016, for Inventory, Accounts Payable, and Sales are provided in the three columns of the schedule below.
a. Complete the schedule to provide the correct adjusted balances at December 31, 2016.

b. Prepare the December 31, 2016, adjusting journal entry that Logan would prepare to record the freight charges described in item 3 above.

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Definitions:

Fiction Film

A movie that tells a scripted, fictional narrative with actors, as opposed to documentaries, which depict real events and people.

Documentary

A term coined by John Grierson in the 1920s to describe formally structured nonfiction films. Documentary has come to refer to any film that is not by design or definition fictional.

Electronic Cinema

The distribution or projection of movies using digital technology instead of traditional film reels.

Zoetrope Studios

A motion picture studio known for creating innovative and critically acclaimed films.