Question

Waterway Inc. took a physical inventory at the end of the year and determined that $847000 of goods were on hand. In addition, the following items were not included in the physical count. Waterway, Inc. determined that $95500 of goods purchased were in transit that were shipped f.o.b. destination (goods were actually received by the company three days after the inventory count). The company sold $39500 worth of inventory f.o.b. destination that did not reach the destination yet. What amount should Waterway report as inventory at the end of the year?

A) 847000

B) 942500

C) 982000

D) 886500

Answer 1

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Waterway Inc.	Amount $
Physical inventory at the end of the year	847,000.00
Good purchased f.o.b. destination	-	These will be included when received.
Add: Good sold f.o.b. destination	39,500.00	These will be included till they have reached the buyer's destination.
Inventory to be reported at the end of the year	886,500.00
So answer is option D $ 886,500.