Question

Umatilla Bank and Trust is considering giving Flint Corporation a loan. Before doing so, it decides that further discussions with Flint Corporation’s accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $300,370. Discussions with the accountant reveal the following.
1. Flint Corporation sold goods costing $58,510 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock until January 12. The goods were not included in the physical inventory because they were not in the warehouse.
2. The physical count of the inventory did not include goods costing $95,240 that were shipped to Flint Corporation FOB destination on December 27 and were still in transit at year-end.
3. Flint Corporation received goods costing $23,320 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count.
4. Flint Corporation sold goods costing $50,750 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Flint Corporation physical inventory.
5. Flint Corporation received goods costing $45,110 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $300,370.

Answer 1

Answer:$364,520 is the year end stock

Explanation:

Stock records at year end. 300,370

1. Add $58,510, ownership of good on fob remains with vendor until delivery.

2.ignore $95240 from closing stock because they have not been receive at year end

3.1gnore $ 23,320 from closing stock because they have not been receive at year end

4. Include 50,750 in closing stock because they have not been deliver at year end.

5. Exclude $45110 from closing stock because they were not receive at year end.