(Inventoriable Costs) In your audit of Jose Oliva Company, you find that a physi

Question

(Inventoriable Costs) In your audit of Jose Oliva Company, you find that a physical inventory on December 31, 2014, showed merchandise with a cost of $448,700 was on hand at that date.You also discover the following items were all excluded from the $448,700.

1. Merchandise of $66,000 which is held by Oliva on consignment. The consignor isthe Max Suzuki Company.

2. Merchandise costing $34,030 which was shipped by Oliva f.o.b. destination to acustomer on December 31, 2014. The customer was expected to receive the merchandise on January 6, 2015.

3. Merchandise costing $47,650 which was shipped by Oliva f.o.b. shipping point to acustomer on December 29, 2014. The customer was scheduled to receive the merchandise onJanuary 2, 2015.

4. Merchandise costing $83,760 shipped by a vendor f.o.b. destination on December 30, 2014, and received by Oliva on January 4, 2015.

5. Merchandise costing$51,870 shipped by a vendor f.o.b. seller on December 31, 2014and received by Garza on January 5, 2015.

Based on the above information, calculate the amount that should appear on Oliva's balance sheet at December 31, 2014, for inventory.

Explanation / Answer

Part no. Amount Ending balance 448700 a not included ,will be included in inventory of consignor b + 34030 c not included d not included as it is FOB destination and will be included in vendor inventory e    +51870 Total 534600

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