Question

Card Company took a physical inventory on December 31. You have pointed out a number of...

Card Company took a physical inventory on December 31. You have pointed out a number of possible problems with the count, help determine the correct amount of ending inventory. Ending inventory per physical count $ 9,100 Reconciling items at year-end. Purchases in transit at December 31 FOB shipping point $ 3,890 FOB destination $ 2,580 Sales shipped and in transit at December 31 FOB shipping point $ 3,150 FOB destination $ 4,180 Consigned goods at December 31 Card Company is the consignor $ 1,680 Card Company is the consignee $ 5,180

What is the correct ending inventory?

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Answer #1

ENDING INVENTORY PER PHYSICAL COUNT $9100

Purchase in transist FOB shipping point + $3890

Sales in transist FOB destination + $4180

consigned goods + $1680

correct inventory value    $18850

fob shipping point (transist) :buyer is the owner of the goods so buyer will report in inventory

fob destination (transist)  :buyer will not record in inventory because he is not the owner of the goods

consignor:consignor transfer the inventory but retain the legal tittle

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