2.MaxCompany\'s inventory balance on December 31, 2016, was $180,000 (based on a
ID: 2554414 • Letter: 2
Question
2.MaxCompany's inventory balance on December 31, 2016, was $180,000 (based on a 12/31/16 physical count) before considering the following transactions: a. Goods shipped to Max fo.b. destination on December 20, 2016, were received on b. Goods shipped to Max f.o.b. shipping point on December 28, 2016, were received on c.Goods shipped from Max to a customer f.o.b. shipping on December 27, 2016, were d. Goods shipped from Max to a customer fo.b. destination on December 26, 2016, were c. Goods costing $22,000 were held on consignment for Miller Inc. Max's goods worth January 4, 2017. The invoice cost was $37,000. January 5. 2017. The invoice cost was $24,000. received by the customer on January 3, 2017. The sales price was $47,000 and the merchandise cost $29,000. received by the customer on Jan 6. The sales price was $27,000 and the merchandise cost $20,000. $18,000 were held on consignment with Walker Inc. Required: Determine the correct inventory amount to be reported in Max's 2016 balance sheet by analyzing each of the above transactions and determining if it should be added to or reduced from the inventory balance or if no update is required (10 points) Inventory balance: $180,000 orrected Inventory balance:Explanation / Answer
Inventory balance 180,000 A. No Effect as pruchase on FOB destination not received - B. Purchasse on FOB shipping point not received to be included 24,000 C. No effect as sales on FOB shipping shall be excluded - D. Sales on FOB destination not received by customer to be included 20,000 E. Goods held as consignee for Miller Inc. -22000 E. Goods with consignee Walker Inc 18,000 Inventory valuation to be shown in books 220,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.