Valuation of Inventory
The inventory on hand at the end of 2016 for Reddall Company is
valued at a cost of $94,000. The following items were not included
in this inventory:
- Purchased goods in transit, under terms FOB shipping point,
invoice price $4,200, freight costs $250.
- Goods out on consignment to Marlman Company, sales price
$4,200, shipping costs of $200.
- Goods sold to Grina Co. under terms FOB destination, invoiced
for $1,900 which included $178 freight charges to deliver the
goods. Goods are in transit.
- Goods held on consignment by Reddall at a sales price of $2,700
which included sales commission of 20% of sales price.
- Purchased goods in transit, shipped FOB destination, invoice
price $2,100 which included freight charges of $190.
Required:
Determine the cost of the ending inventory that Reddall should
report on its December 31, 2016, balance sheet, assuming that its
selling price is 140% of the cost of the inventory.