Question

Beck Company has inventory of $ 740 comma 000 in its stores as of December 31. It also has two shipments inminustransit that left the​ suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $ 236 comma 000 was sold f.o.b. destination and the second shipment of $ 108 comma 000 was sold f.o.b. shipping point. Beck Company also has consigned goods of $ 75 comma 000 awaiting sale with Meyer Company. What amount of inventory should Beck Company report on its balance sheet as of December​ 31?

Answer 1

Answer:

The invention balance sheet as at 31 December is $923,000

Explanation:

In this question, we are asked to calculate the amount of money Beck company will report in its balance sheet as of December 31st.

To do this, we simply employ a mathematical approach.

Mathematically, the amount of inventory recorded by Beck company on its balance sheet as of December 31st would be;

Inventory in stores + Goods in consignment + Good in transit F.o.b shipping point

We identify these values as follows;

Inventory in stores = $740,000

Goods in transit f.o.b shipping point = $108,000

Goods in consignment = $75,000

The amount of inventory Beck company should record will be; $740,000 + $108,000 + $75,000 = $923,000