Exercise 8-6 Goods in transit [L08-2] The Kwok Company\'s inventory balance on D

Question

Exercise 8-6 Goods in transit [L08-2] The Kwok Company's inventory balance on December 31, 2018, was $240,000 (based on a 12/31/18 physical count) before considering the following transactions 1. Goods shipped to Kwok fo.b. destination on December 20, 2018, were received on January 4, 2019. The invoice cost was $45,000. 2. Goods shipped to Kwok f.o.b. shipping point on December 28, 2018, were received on January 5, 2019. The invoice cost was 3. Goods shipped from Kwok to a customer fo.b. destination on December 27, 2018, were received by the customer on January 3 4. Goods shipped from Kwok to a customer fo.b. destination on December 26, 2018, were received by the customer on December 30, 5. Goods shipped from Kwok to a customer fo.b. shipping point on December 28, 2018, were received by the customer on January 4, $32,000. 2019. The sales price was $55,000 and the merchandise cost $37,000 2018. The sales price was $35,000 and the merchandise cost $28,000 2019. The sales price was $40,000 and the merchandise cost $27,000. Required: Determine the correct inventory amount to be reported in Kwok's 2018 balance sheet

Explanation / Answer

Inventory as reported 240000 1 0 2 32000 3 37000 4 0 5 0 Correct inventory balance 309000

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