Question

In: Accounting

The December 31, 2021, year-end inventory balance of the Raymond Corporation is $250,000. You have been asked to review...

The December 31, 2021, year-end inventory balance of the Raymond Corporation is $250,000. You have been asked to review the following transactions to determine if they have been correctly recorded.

  1. Goods shipped to Raymond f.o.b. destination on December 26, 2021, were received on January 2, 2022. The invoice cost of $50,000 is included in the preliminary inventory balance.
  2. At year-end, Raymond held $34,000 of merchandise on consignment from the Harrison Company. This merchandise is included in the preliminary inventory balance.
  3. On December 29, merchandise costing $8,000 was shipped to a customer f.o.b. shipping point and arrived at the customer’s location on January 3, 2022. The merchandise is not included in the preliminary inventory balance.
  4. At year-end, Raymond had merchandise costing $35,000 on consignment with the Joclyn Corporation. The merchandise is not included in the preliminary inventory balance.


Required:
Determine the correct inventory amount to be reported in Raymond’s 2021 balance sheet.

Solutions

Expert Solution

Inventory balance as reported 250000
Add: Merchandise on consignment with Joclyn Corp. 35000
Less: Merchandise shipped to Raymond f.o.b. destination on December 26 -50000
Less: Merchandise held on consignment from the Harrison Company -34000
Correct inventory balance 201000

ekkarill92 answered 3 years ago
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