At December 31, 2022 Sauve Company's inventory records indicated a balance of $470,000. Upon further investigation it was determined that this amount included the following: $40,000 in inventory purchases made by Sauve shipped from the seller December 27, 2022 terms FOB destination, but not due to be received until January 3, 2023. What is Sauve's correct ending inventory balance at December 31, 2022? $430,000 $470,000 $510,000 $545,000

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.