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takeAssignment/take AssignmentMain.do?invoker assignmentsBtakeAssignmentSessionLocatorsassignment-take&inprogress-false; eBook Calculator Valuation of Inventory The inventory on hand at the end of 2016 for Reddall Company is valued at a cost of $94,550. The following items were not included in this inventory . Purchased goods in transit, under terms FOB shipping point, invoice price $4,100, freight costs $220. 2. Goods out on consignment to Marlman Company, sales price $4,200, shipping costs of $250. 3. Goods sold to Grina Co. under terms FOB destination, invoiced for $1,900 which included $178 freight charges to deliver the goods. Goods are in transit. 4, Goods held on consignment by Reddall at a sales price of $2,700 which included sales commission of 20% of sales price S. Purchased goods in transit, shipped FOB destination, invoice price $2,100 which indluded freight charges of $190. Required Determine the cost of the ending inventory that Reddall should report on its December 31, 2016, balance sheet, assuming that ts selling price is i40% of the cost of the inventory

Explanation / Answer

Solution: 103,350

Working:

Working Ending inventory on hand (before adjustments) 94,550 Goods in transit (FOB shipping point) 4,100 Freight costs (freight-in) 220 Goods out on consignment 3,250 4200*1.4 + 220 Goods sold to Grina Company, FOB destination 1,230 (1900-178) / 1.4 Not recorded in inventory by consignee 0 Not recorded in inventory until received by customer 0 Ending inventory, December 31, 2016 103,350

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