Given the Following Items and Costs as of the Balance

question 34

Multiple Choice

Given the following items and costs as of the balance sheet date,determine the value of Light Company's merchandise inventory.
$2,000 goods sold by Light to another company.The goods are in transit and shipping terms are FOB shipping point.
$3,000 goods sold by another company to Light.The goods are in transit and shipping terms are FOB shipping point.
$4,000 owned by Light but in the possession of another company the consignee.
Damaged goods owned by Light which originally cost $5,000,but which now have an $800 net realizable value.

• A)$7,000
• B)$7,800
• C)$9,800
• D)$9,000
• E)$6,800

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Definitions:

Financial Statements

Reports that summarize the financial performance and position of a company.

Working Papers

Documents prepared or obtained by auditors as part of their audit process, containing the evidence and conclusions on which their opinion is based.

Accounting Adjustments

Entries made in the books of accounts to accurately reflect the revenues and expenses for a given period, including accruals, deferrals, and estimates.

Account Balances

The amounts of money in an account, representing assets or liabilities at a particular point in time.