In: Accounting
Valuation of Inventory
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:
1. Purchased goods in transit, under terms FOB shipping point, invoice price $4,000, freight costs $200.
2. Goods out on consignment to Marlman Company, sales price $5,600, shipping costs of $200.
3. 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.
4. Goods held on consignment by Reddall at a sales price of $2,700 which included sales commission of 20% of sales price.
5. Purchased goods in transit, shipped FOB destination, invoice price $2,100 which included freight charges of $190.
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.
Inventory as per books | 94,000.00 |
Line 1(4000+200) | 4,200.00 |
Line 2 (5600/140*100+200) | 4,200.00 |
Line 3 | 1,900.00 |
Line 4 | - |
Line 5 | - |
Adjusted Ending Inventory | 104,300.00 |
Please Note:
Dear Student,
Best effort has been made to give quality and correct answer. But if you find any issues please comment your concern. I will definitely resolve your query.
Also please give your positive rating.