Beck Company has inventory of $ 770 comma 000 $770,000 in its stores as of Decem

Question

Beck Company has inventory of $ 770 comma 000 $770,000 in its stores as of December 31. It also has two shipments in minus ?transit that left the? suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $ 263 comma 000 $263,000 was sold f.o.b. destination and the second shipment of $ 104 comma 000 $104,000 was sold f.o.b. shipping point. Beck Company also has consigned goods of $ 72 comma 000 $72,000 awaiting sale with Meyer Company. What amount of inventory should Beck Company report on its balance sheet as of December? 31?

Explanation / Answer

Inventory valuation as on Dec31: Physical inventory in hand 770000 Add: Shipment purchased on FOB shipping in transit 104000 Less: Consignor stock held unsold -72000 Inventory as on Dec 31 to be shown in books 802000 Note: Goods purchased FOB destination will be treated as inventory only on actual receipts of goods.

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