Question

The Vintage Car Parts Company of Elko Nevada was closed on January 1st for New Year’s Day, and stayed closed on January 2nd in order to take a complete physical inventory. At the conclusion of the physical count on January 2nd, the total physically inventory counted was $423,700. Because the company was not quite sure about a number of inventory related items, they have provided the following list for your review and recommendation on how to handle the items noted to be sure they have a correct physical inventory as of December 31st. 1. During the physical inventory on January 2nd, a freight truck arrived with a shipment of car parts that had been ordered on December 21st. The freight document showed the order left the supplier’s warehouse on December 22nd and was shipped FOB Destination with a guaranteed arrival date of December 28th. The shipment was delayed due to a heavy sierra snow storm; however, because it was originally guaranteed to arrive on December 28th, the parts were counted and included in physical inventory; the total cost of the car parts was $21,945. 2. Five days later, on January 7th a large shipment of parts totaling $17,850 arrived. The shipping documents indicated the order left the supplier’s warehouse FOB shipping point on December 31st. This order was Not counted since it had arrived 7 days after December 31st. 3. On December 27th Vintage Car Parts had shipped a FEDX 2 day rush order to be delivered on December 29th to a Corvette restoration shop in Concord California. The cost of the inventory was $5,900 and the invoice price to the customer was $9,875. The rush shipment was sent FOB destination, however, due to the sierra snow storm it actually arrived at the restoration shop in Concord on January 2nd. Vintage Car Parts did NOT include the shipment in their physical inventory since it was a FEDX 2 day rush shipment to the customer with a planned delivery date of December 29th. 4. On December 23rd Vintage Car Parts received a shipment on consignment totaling $9,575 from the Classic General Motors Parts Company. On December 27th Vintage Car Parts sold $2,000 of the consigned inventory to a customer . The sale was shipped FOB destination and the customer received the shipment on December 30th. The remaining balance of the inventory totaling $7,575 ($9,575 - $2,000) was counted and included in the physical inventory of Vintage Car Parts. Required: Prepare a schedule detailing the correct amount of inventory Vintage Car Parts should report on their December 31st year end Balance Sheet.

Answer 1

The answer is$417930

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