Question

Sheldon Company just took its physical inventory on December 31. The count of inventory items on hand at the company’s business locations resulted in a total inventory cost of $300,000. In reviewing the details of the count and related inventory transactions, you have discovered the following items that had not been considered. 1. Sheldon has sent inventory costing $28,000 on consignment to Richfield Company. All of this inventory was at Richfield’s showrooms on December 31. 2. The company did not include in the count inventory (cost, $20,000) that was sold on December 28, terms FOB shipping point. The goods were in transit on December 31. 3. The company did not include in the count inventory (cost, $13,000) that was purchased with terms of FOB shipping point. The goods were in transit on December 31. Compute the correct December 31 inventory.

Answer 1

The computation of the correct December 31 Inventory of Sheldon Company is $341,000.

How is ending inventory computed?

The ending inventory should include goods on consignment and goods bought on FOB shipping point on or before December 31.

The ending inventory does not include goods sold on the FOB shipping point before the end of the year.

Data and Calculations:

Physical count value of inventory = $300,000

1. Inventory on consignment = $28,000

3. Inventory in transit = $13,000

Correct ending inventory = $341,000 ($300,000 + $28,000 + $13,000)

Thus, the computation of the correct December 31 Inventory of Sheldon Company is $341,000.

Learn more about determining correct ending inventory at brainly.com/question/25947903