Answer:
$261,500
Step-by-step explanation:
What amount should Nash report as its December 31 inventory?
Item Amount
Goods on hand as per physical count $208,000
(+) Goods purchased from Swifty $30,000
Corporation FOB shipping point
(+) Goods sold to Marigold Corp <u>$23,500</u>
FOB destination (at cost value)
Ending inventory <u>$261,500</u>
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<em>Notes</em><u>:
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1) In case of FOB shipping point, the ownership of goods is transferred to the buyer when the goods are shipped and hence in the case of purchases from Swifty corporation, the goods should be included in the inventory of Nash's Trading Post as the goods are shipped and are in transit.
2) In case of FOB destination, the ownership of goods is transferred to the buyer when the goods reaches to the buyer, hence in the case of sales made to Marigold Corp, the goods are still in transit and the ownership is not transferred to Marigold Corp, hence Nash's Trading Post should included that goods in its inventory.
