Purchase Solution

Physical inventory of Latner Shoe Distributor Company

Not what you're looking for?

Ask Custom Question

You encountered the following situations during the December 31,
2007, physical inventory of Latner Shoe Distributor Company:
a. Latner maintains a large portion of the shoe merchandise in 10 warehouses through -
out the eastern United States. This ensures swift delivery service for its chain of stores.
You are assigned alone to the Boston warehouse to observe the physical inventory process. During the inventory count, several express trucks pulled in for loading.
Although infrequent, express shipments must be attended to immediately. As a result, the employees who were counting the inventory stopped to assist in loading the express trucks. What should you do?
b. (1) In one storeroom of 10,000 items, you have test-counted about 200 items of high value and a few items of low value. You found no misstatements. You also note that the employees are diligently following the inventory instructions. Do you think you have tested enough items? Explain.
(2) What would you do if you test-counted 150 items and found a substantial number of counting errors?
c. In observing an inventory of liquid shoe polish, you note that one lot is 5 years old. From inspection of some bottles in an open box, you find that the liquid has solidified in most of the bottles. What action should you take?
d. During your observation of the inventory count in the main warehouse, you found that most of the pre-numbered tags that had been incorrectly filled out are being destroyed and thrown away.

Purchase this Solution
Solution Summary

Your tutorial is 196 words and gives you some potential ways to minimize the inventory count errors or issues when the count process is compromised.

Solution Preview

Q: Latner maintains a large portion of the shoe merchandise in 10 warehouses through -
out the eastern United States. This ensures swift delivery service for its chain of stores.
You are assigned alone to the Boston warehouse to observe the physical inventory process. During the inventory count, several express trucks pulled in for loading.
Although infrequent, express shipments must be attended to immediately. As a result, the employees who were counting the inventory stopped to assist in loading the express trucks. What should you do?

A: Of course it is better if there is no movement during a count. But most clients would not demand that the count start all over if this occurred. Assure that the items that are shipped (loaded on express truck) are not counted as both sold and ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

View More Free Quizzes
Related BrainMass Solutions

  • Vertical Integration and Market Foreclosure

    Generally speaking, the idea of market foreclosure in vertical integration is that when two companies (where one is a supplier) turn into one company, competitors in either downstream or upstream markets are closed out of the market they previously enjoyed

  • Risks with physically accounting for inventory

    559662 Risks with physically accounting for inventory You are responsible for auditing a wholesale cosmetics distributor with an inventory consisting of thousands of individual items.

  • Computer-Assisted Substantive Tests for Inventory

    208118 Computer-Assisted Substantive Tests for Inventory An auditor is conducting an audit of the financial statements of a wholesale cosmetics distributor with an inventory consisting of thousands of individual items.

  • Computer-Assisted Substantive Tests for Inventory Audit

    of a wholesale cosmetics distributor with an inventory consisting of thousands of individual items.

  • Risk of Stock vs. Excess Inventory

    537127 Risk of Stock vs. Excess Inventory How do you decide to balance the risks of stock outs against the costs of maintaining excess shoe inventory? There are many risks associated with stock outs.

  • Cash flow assumption

    108041 Cash flow assumption Under what circumstances do generally accepted accounting principle permit the use of an inventory cost flow assumption? Must a cost flow assumption closely parallel the physical movement of the company's merchandise?

  • Discussing Inventory Policies

    For every order of 10,000 pairs of shoes following ingredients would be used and ordered:  20,000 rubber soles  20,000 shoe bodies  20,000 shoe laces 2.

  • Supply Chain management

    For example, in the pro and semi-pro photography world (that are familiar), Amazon has become a major player, yet they have almost no real physical goods inventory.

  • Types of costs in an inventory system

    Identify and explain the types of costs that are involved in an inventory system.  Inventory consists of the products that a company has stored for resale to its customers.

View More Related Solutions