Question

At December 31, 2019 ABC Company’s inventory records indicated a balance of $878,000. Upon further investigation it was determined that this amount included the following: · $168,000 in inventory purchases made by Howell shipped from the seller 12/27/19 terms FOB destination, but not due to be received until January 2nd · $111,000 in goods sold by ABC with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th. · $9,000 of goods received on consignment from Westwood Company What is ABC’s correct ending inventory balance at December 31, 2019?

Answer 1

Answer:

$ 701,000

Explanation:

Balance At December 31, 2019 = $878,000

$168,000 will be deducted since these are not due to be received until January 2nd as well as $9,000 will also be deducted

$878,000 - $168,000 - $9,000 = $ 701,000