value 1.33 points The Kwok Company\'s inventory balance on December 31, 2016, wa
ID: 2394835 • Letter: V
Question
value 1.33 points The Kwok Company's inventory balance on December 31, 2016, was $205,000 (based on a 12/31/16 physical count) before considering the following transactions 1. Goods shipped to Kwok f.o.b. destination on December 20, 2016, were received on January 4. 2017 The invoice cost was $38,000 2. Goods shipped to Kwok fo.b. shipping point on December 28, 2016, were received on January 5, 2017. The invoice cost was $25,000 3. Goods shipped from Kwok to a customer fo.b. destination on December 27, 2016, were received by the customer on January 3, 2017. The sales price was $48,000 and the merchandise cost $30,000 4. Goods shipped from Kwok to a customer fo.b. destination on December 26, 2016, were received by the customer on December 30, 2016. The sales price was $28,000 and the merchandise cost $21,000 5. Goods shipped from Kwok to a customer fo.b. shipping point on December 28, 2016, were received by the customer on January 4, 2017. The sales price was $33,000 and the merchandise cost $20,000 Required: Determine the correct inventory amount to be reported in Kwok's 2016 balance sheet.Explanation / Answer
Amount Inventory balance before additional transactions $205,000.00 2) Goods shipped F.O.B. shipping point, 12/28 $25,000.00 3) Goods shipped F.O.B. destination, 12/27 $30,000.00 Correct inventory balance $260,000.00 Reason for non- inclusion 1) At f.o.b. destination ownership passes to buyer at the receipt of goods 4) Goods are received before 31st dec Closing 5) f.o.b. shipping point Ownership pases to buyer at the shipping point
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