Question

The inventory account of Cullumber Company at December 31, 2020, included the following items:

		Inventory Amount
Merchandise out on consignment at sales price    (including markup of 40% on selling price)		$61000
Goods purchased, in transit (shipped f.o.b. shipping point)		49000
Goods held on consignment by Cullumber		63000
Goods out on approval (sales price $31400, cost $26600)		31400

Based on the above information, the inventory account at December 31, 2020, should be reduced by

$141200.

$104400.

$92200.

$92400.

Answer 1

	Included	Excluded
Goods sent on consignment	$         36,600	$       24,400
( sale price - markup)
($61000-40%)
Goods in transit	$         49,000	$                -
Goods held on consignment by Cullumber	$                   -	$       63,000
( not to be included)
Goods out on approval	$         26,600	$         4,800
( only cost to be included)
Total	$       112,200	$       92,200
Correct Option : $92200