Exercise 8-2 In your audit of Alan Company, you find that a physical inventory o

Question

Exercise 8-2 In your audit of Alan Company, you find that a physical inventory on December 31, 2017, showed merchandise with a cost of $440,500 was on hand at that date. You also discover the following items were all excluded from the $440,500 1. Merchandise of $56,370 which is held by Alan on consignment. The consignor is the Max Suzuki Company. 2. Merchandise costing $36,040 which was shipped by Alan f.o.b. destination to a customer on December 31, 2017. The customer was expected to receive the merchandise on January 6, 2018. 3. Merchandise costing $47,030 which was shipped by Alan f.o.b.shipping point to a customer on December 29, 2017. The customer was scheduled to receive the merchandise on January 2, 2018. 4. Merchandise costing $87,450 shipped by a vendor f.o.b. destination on December 30, 2017, and received by Alan on January 4, 2018. 5. Merchandise costing $51,660 shipped by a vendor f.o.b. shipping point on December 31, 2017, and received by Alan orn January 5, 2018. Based on the above information, calculate the amount that should appear on Alan's balance sheet at December 31, 2017,for inventory Inventory as on December 31, 2017 Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Inventory per physical count 440,500
Goods in transit to customer, f.o.b. destination 36,040
Goods in transit from vendor, f.o.b. shipping point 51,660
Inventory to be reported on balance sheet=440500+36040+51660=528200
The consigned goods 56370 is excluded

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