Question

Bedrock Company reported a December 31 ending inventory balance of $416,000. The following additional information is also available: The ending inventory balance of $416,000 included $72,800 of consigned inventory for which Bedrock was the consignor. The ending inventory balance of $416,000 included $23,600 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. Based on this information, the correct balance for ending inventory on December 31 is:

Answer 1

Answer:

$392,400

Explanation:

The computation of correct balance for ending inventory on December 31 is shown below:-

Correct balance for ending inventory = Ending inventory – Office supplies

= $416,000 - $23,600

= $392,400

Therefore for computing the correct balance for ending inventory we simply deduct the office supplies from ending inventory and ignore all other amounts as they are not relevant.