At December 31, 2017 Mohling Company’s inventory records indicated a balance of

Question

At December 31, 2017 Mohling Company’s inventory records indicated a balance of $632,000.

Upon further investigation it was determined that this amount included the following:

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$112,000 in inventory purchases made by Mohling shipped from the seller 12/27/17 terms FOB destination, but not due to be received until January 2nd

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$74,000 in goods sold by Mohling with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th.

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$6,000 of goods received on consignment from Dollywood Company

What is Mohling’s correct ending inventory balance at December 31, 2017?

$520,000

$636,000

$514,000

$440,000

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$112,000 in inventory purchases made by Mohling shipped from the seller 12/27/17 terms FOB destination, but not due to be received until January 2nd

-

$74,000 in goods sold by Mohling with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th.

-

$6,000 of goods received on consignment from Dollywood Company

Explanation / Answer

Inventory balance $   632,000 Less: purchase in transit $ (112,000) Less: Consignment goods $      (6,000) Correct ending inventory $   514,000

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