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Farley Bains, an auditor with Nolls CPAs, is performing a review of Teal Mountain Company's Inventory account. Teal Mountain did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $888,000. However, the following information was not considered when determining that amount. 1. Included in the company's count were goods with a cost of $273,600 that the company is holding on consignment. The goods belong to Nader Corporation. 2. The physical count did not include goods purchased by Teal Mountain with a cost of $48,000 that were shipped FOB shipping point on December 28 and did not arrive at Teal Mountain's warchouse until January 3. 3. Included in the Inventory account was $20,400 of office supplies that were stored in the warchouse 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 was 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 $48,000 and a cost of $34,800. The goods were not included in the count because they were sitting on the dock. 5. Included in the count was $60,000 of goods that were parts for a machine that the company no longer made. Given the hightech nature of Teal Mountain'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." 5. Included in the count was $60,000 of goods that were parts for a machine that the company no longer made. Given the high. tech nature of Teal Mountain'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." Prepare a schedule to determine the correct inventory amount
Farley Bains, an auditor with Nolls CPAs, is performing a review of Teal Mountain Company's Inventory account. Teal Mountain did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $888,000. However, the following information was not considered when determining that amount. 1. Included in the company's count were goods with a cost of $273,600 that the company is holding on consignment. The goods belong to Nader Corporation. 2. The physical count did not include goods purchased by Teal Mountain with a cost of $48,000 that were shipped FOB shipping point on December 28 and did not arrive at Teal Mountain's warchouse until January 3. 3. Included in the Inventory account was $20,400 of office supplies that were stored in the warchouse 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 was 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 $48,000 and a cost of $34,800. The goods were not included in the count because they were sitting on the dock. 5. Included in the count was $60,000 of goods that were parts for a machine that the company no longer made. Given the hightech nature of Teal Mountain'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." 5. Included in the count was $60,000 of goods that were parts for a machine that the company no longer made. Given the high. tech nature of Teal Mountain'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." Prepare a schedule to determine the correct inventory amount
Adjusted Inventory Balance: $492,000 (after excludingconsignment goods, FOB purchases, obsolete parts, and including goods shipped on Dec 29th and office supplies).The inventory schedule for adjustments is as follows:Inventory balance (given) $888,000Less: Consignment goods (Cost = $273,600) ($273,600)Add: Goods purchasedFOB(Cost = $48,000) ($48,000)Less:Obsolete parts($60,000) ($60,000)Add: Goods shipped on December 29th, FOB (Cost = $34,800) ($34,800)Add: Office Supplies ($20,400) $20,400Correct Inventory Balance = $492,000Explanation of Adjustments:1. Goods with a cost of $273,600 that the company is holding on consignment should not be included in the inventory of the company.2. Goods purchased FOB (Cost = $48,000) on December 28th that were received on January 3rd are not part of the year-end inventory.3. Office supplies that are intended for use by the company's supervisors and managers during the upcoming year should not be included in the year-end inventory.4. Goods shipped on December 29th, FOB (Cost = $34,800), are considered part of the year-endinventoryeven if they were not included in the physical count because they were sitting on the dock.5. Obsolete parts that the company no longer uses should not be included in the inventory.After making these adjustments, the correct inventory balance is determined to be $492,000.Learn more aboutconsignment goodsbrainly.com/question/30713403#SPJ11...