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In: Accounting

University Bookstore took a physical inventory on December 31. You have pointed out a number of...

University Bookstore took a physical inventory on December 31. You have pointed out a number of possible problems with the count, as indicated below. Ending inventory per physical count $ 120,000 Reconciling items at year-end. Purchases in transit at December 31 FOB shipping point $ 46,680 FOB destination $ 30,970 Sales shipped and in transit at December 31 FOB shipping point $ 37,850 FOB destination $ 50,160 Consigned goods at December 31 Company is the consignor $ 34,320 Card Company is the consignee $ 62,210 What is the correct ending inventory balance on the company's balance sheet?

Solutions

Expert Solution

Ending inventory per physical count                          120,000
Adj. 1 Purchases in transit at December 31 FOB shipping point                            46,680 (Goods in transit sent on fob shipping point are property of buyer)
Adj 2 Purchases in transit at December 31 FOB destination                                      -   (Goods in transit sent on fob destination point are property of seller)
Adj 3 Sales shipped and in transit at December 31 FOB shipping point                                      -   (Goods in transit sent on fob shipping point are property of buyer)
Adj 4 Sales shipped and in transit at December 31 FOB destination                            50,160 (Goods in transit sent on fob destination point are property of seller)
Adj 5 Consigned goods at December 31 Company is the consignor                            34,320 Consigner is the sole onwer of the goods and not consignee
Adj 6 Card Company is the consignee                          (62,210) (Deducted because they were included at the time of physical count )
Correct Inventory balance                          188,950

ekkarill92 answered 1 year ago
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