Question

Sandoval needs to determine its year-end inventory. the warehouse contains 20,000 units, of which 3,000 were damaged by flood and are not sellable. another 2,000 units were purchased from markor company, fob shipping point, and are currently in transit. the company also consigns goods and has 4,000 units at a consignee's location. how many units should sandoval include in its year-end inventory

Answer 1

Year end inventory is 19,000 units.

Take starting units - damaged/unsellable inventory - sold units + consignment units (which are still owned while on consignment)

20000 - 3000 - 2000= 15,000 units

15,000 + 4,000 units on consignment = 19,000 units