You are auditing Martha’s Prison Clothes, Inc., as of December 31, 2014. The inventory for orange jumpsuits shows 1,263 suits at $782 for a total of $987,666. When you look at the invoices for the jumpsuits, you see the following:
Inventory Number Date Quantity Unit
Price Total
12732 11/22/13 1,000 $ 765 $ 765,000
12844 12/03/13 800 777 621,600
12905 12/28/13 600 782 469,200
Required:
a.
Determine the adjusting entry, if any, for the cost of inventory at December 31, 2014. (In cases where no entry is required, please select the option "No adjusting journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
General journal Debit Credit
Cost of goods sold 3315
Inventory 3315
b-1. Would your answer to part (a) be different if you saw an invoice dated January 9, 2015, for 500 suits at $750?
Yes
b-2.
If yes, determine the adjusting entry. (In cases where no entry is required, please select the option "No adjusting journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
