The inventory on hand at the end of 2016 for Reddall Company is valued at a...

The inventory on hand at the end of 2016 for Reddall Company is valued at a cost of $94,000. The following items were not included in this inventory:

Purchased goods in transit, under terms FOB shipping point, invoice price $4,000, freight costs $200.
Goods out on consignment to Marlman Company, sales price $5,600, shipping costs of $300.
Goods sold to Grina Co. under terms FOB destination, invoiced for $1,900 which included $178 freight charges to deliver the goods. Goods are in transit.
Goods held on consignment by Reddall at a sales price of $2,700 which included sales commission of 20% of sales price.
Purchased goods in transit, shipped FOB destination, invoice price $2,100 which included freight charges of $190.

Required:

Determine the cost of the ending inventory that Reddall should report on its December 31, 2016, balance sheet, assuming that its selling price is 140% of the cost of the inventory.

$_________

Expert Solution

inventory on hand	94,000
add:purchased goods under FOB shipping point (4000+200)	4,200
add:goods out on consignment (5600/140%)+300 shipping cost	4,300
add:goods sold to Grina co. under FOB destination (1900-178)/140%	1,230
goods held on consignment need not be included in the inventory	nil
purchased goods on FOB destination to be included only after receving	nil
total cost of ending inventory	103,730

ekkarill92 answered 2 years ago

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