Question

Crane Company took a physical inventory on December 31 and determined that goods costing $180,000 were on hand. Not included in the physical count were $20,000 of goods purchased from Nash's Trading Post, LLC, FOB, shipping point, and $20,000 of goods sold to Swifty Corporation for $30,000, FOB destination. Both the Nash purchase and the Swifty sale were in transit at year-end.
Required:
What amount should Crane report as its December 31 inventory?

Answer 1

Answer:

$220,000

Explanation:

Calculation for What amount should Crane report as its December 31 inventory

Using this formula

Ending inventory =Goods costing on hand+Physical count of goods purchased+Goods sold

Let plug in the formula

Ending inventory = $180,000 + $20,000 + $20,000

Ending inventory = $220,000

Therefore the amount that Crane should report as its December 31 inventory is $220,000