A listing of the Minerva Company\'s inventory items at the end of 2007 totals $8

Question

A listing of the Minerva Company's inventory items at the end of 2007 totals $85,000. Included in this amount are the following items:

Merchandise in transit as of 12/21/2007, purchased FOB

   shipping point

$5,800

Goods held by Minerva as consignee from Nirvana

6,000

Goods out on consignment, at cost plus 50%

   markup on cost plus $100 delivery charge.

4,600

What is the dollar amount of Minerva's 2007 ending inventory that should be reported on the balance sheet?

a.

$73,100

b.

$79,200

c.

$79,000

d.

$77,500

Merchandise in transit as of 12/21/2007, purchased FOB

   shipping point

$5,800

Goods held by Minerva as consignee from Nirvana

6,000

Goods out on consignment, at cost plus 50%

   markup on cost plus $100 delivery charge.

4,600

Explanation / Answer

Dollar amount of Minerva's 2007 ending inventory: Inventory reported 85000 Goods held as consignee -6000 Excess amount included for goods on consignment -1500 =(4600-100)/150%*50% Correct inventory value 77500 Option D is correct

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