At December 31, 2020, Jefferson, Inc. had inventory on hand amounting to $270,000. The following items were not included in this inventory: Goods sold and still in transit, shipped Dec. 29 FOB destination, sales price $12,000, freight costs $500. Goods held by Johnson on consignment from Miller Company, sales price $12,500, shipping costs $300. Goods returned by customers and held pending inspection, cost $1,100. On Jan. 1, 2021, a monthly freight bill for $1,600 was received. The bill specifically related to merchandise purchased in December 2020, 40 percent of which was sold in December. No related adjustment had yet been made. Jefferson sells at a gross profit of 25% on cost. Required: Compute the cost of ending inventory to be reported on Jefferson's December 31, 2020, balance sheet.
At December 31, 2020, Jefferson, Inc. had inventory on hand amounting to $270,000. The following items were not included in this inventory: Goods sold and still in transit, shipped Dec. 29 FOB destination, sales price $12,000, freight costs $500. Goods held by Johnson on consignment from Miller Company, sales price $12,500, shipping costs $300. Goods returned by customers and held pending inspection, cost $1,100. On Jan. 1, 2021, a monthly freight bill for $1,600 was received. The bill specifically related to merchandise purchased in December 2020, 40 percent of which was sold in December. No related adjustment had yet been made. Jefferson sells at a gross profit of 25% on cost. Required: Compute the cost of ending inventory to be reported on Jefferson's December 31, 2020, balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
At December 31, 2020, Jefferson, Inc. had inventory on hand amounting to $270,000. The following items were not included in this inventory:
- Goods sold and still in transit, shipped Dec. 29 FOB destination, sales price $12,000, freight costs $500.
- Goods held by Johnson on consignment from Miller Company, sales price $12,500, shipping costs $300.
- Goods returned by customers and held pending inspection, cost $1,100.
- On Jan. 1, 2021, a monthly freight bill for $1,600 was received. The bill specifically related to merchandise purchased in December 2020, 40 percent of which was sold in December. No related adjustment had yet been made.
Jefferson sells at a gross profit of 25% on cost.
Required:
Compute the cost of ending inventory to be reported on Jefferson's December 31, 2020, balance sheet.
$
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