At December 31, 2017 Blossom Company inventory records indicated a balance of $6

Question

At December 31, 2017 Blossom Company inventory records indicated a balance of $654000. Upon further investigation it was determined that this amount included the following:

? $130000 in inventory purchases made by Blossom shipped from the seller 12/27/17 terms FOB destination, but not due to be received until January 2nd
? $72000 in goods sold by Blossom with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th
? $6400 of goods received on consignment from Dollywood Company

What is Blossom correct ending inventory balance at December 31, 2017?

Explanation / Answer

As per the records the inventory balance is $654,000 at December 31, 2017.

The correct ending inventory balance at December 31, 2017 is $ 517,600 ($654,000 - $130,000 - $6,400)

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