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Jensen Tire had two large shipments in transit at December 31. One was a $130,000 inbound purchase of merchandise (shipped December 28, free on board shipping point), which arrived at Jensen's receiving dock on January 4. The other shipment was a $95,000 outbound sale of merchandise to a customer, which was shipped and billed by Jensen on December 30 (terms free on board shipping point) and reached the customer on January 3. In taking a physical inventory on December 31, Jensen counted all goods on hand and priced the inventory on the basis of average cost. Determined in this manner, the total inventory amount was $600,000. No goods in transit were included in this figure. Required: a. What amount should appear as inventory on the company's balance sheet at December 31? b. If the incoming purchase had been shipped free on board destination, what would the correct inventory amount be? c. If the outgoing shipment of merchandise to a customer had been shipped free on board destination, what would the correct inventory amount be. In answering this question, ignore part B and return to the original statement concerning the two shipments. Complete this question by entering your answers in the tabs below. Required A Required B Required C If the outgoing shipment of merchandise to a customer had been shipped free on board destination, what would the correct inventory amount be. In answering this question, ignore part B and return to the original statement concerning the two shipments. Inventory amount Required B Required C

Jensen Tire had two large shipments in transit at December 31. One was a $130,000 inbound purchase of merchandise (shipped December 28, free on board shipping point), which arrived at Jensen's receiving dock on January 4. The other shipment was a $95,000 outbound sale of merchandise to a customer, which was shipped and billed by Jensen on December 30 (terms free on board shipping point) and reached the customer on January 3. In taking a physical inventory on December 31, Jensen counted all goods on hand and priced the inventory on the basis of average cost. Determined in this manner, the total inventory amount was $600,000. No goods in transit were included in this figure. Required: a. What amount should appear as inventory on the company's balance sheet at December 31? b. If the incoming purchase had been shipped free on board destination, what would the correct inventory amount be? c. If the outgoing shipment of merchandise to a customer had been shipped free on board destination, what would the correct inventory amount be. In answering this question, ignore part B and return to the original statement concerning the two shipments. Complete this question by entering your answers in the tabs below. Required A Required B Required C If the outgoing shipment of merchandise to a customer had been shipped free on board destination, what would the correct inventory amount be. In answering this question, ignore part B and return to the original statement concerning the two shipments. Inventory amount Required B Required C

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jensen Tire had two large shipments in transit at December 31. One was a $130,000 inbound purchase of merchandise (shipped December 28, free on board shipping point), which arrived at Jensen's receiving dock on January 4. The other shipment was a $95,000 outbound sale of merchandise to a customer, which was shipped and billed by Jensen on December 30 (terms free on board shipping point) and reached the customer on January 3. In taking a physical inventory on December 31, Jensen counted all goods on hand and priced the inventory on the basis of average cost. Determined in this manner, the total inventory amount was $600,000. No goods in transit were included in this figure. Required: a. What amount should appear as inventory on the company's balance sheet at December 31? b. If the incoming purchase had been shipped free on board destination, what would the correct inventory amount be? c. If the outgoing shipment of merchandise to a customer had been shipped free on board destination, what would the correct inventory amount be. In answering this question, ignore part B and return to the original statement concerning the two shipments. Complete this question by entering your answers in the tabs below. Required B Required C If the outgoing shipment of merchandise to a customer had been shipped free on board destination, what would the correct inventory amount be. In answering this question, ignore part B and return to the original statement concerning the two. shipments. Inventory amount Required A < Required B Required C >
Transcribed Image Text:Jensen Tire had two large shipments in transit at December 31. One was a $130,000 inbound purchase of merchandise (shipped December 28, free on board shipping point), which arrived at Jensen's receiving dock on January 4. The other shipment was a $95,000 outbound sale of merchandise to a customer, which was shipped and billed by Jensen on December 30 (terms free on board shipping point) and reached the customer on January 3. In taking a physical inventory on December 31, Jensen counted all goods on hand and priced the inventory on the basis of average cost. Determined in this manner, the total inventory amount was $600,000. No goods in transit were included in this figure. Required: a. What amount should appear as inventory on the company's balance sheet at December 31? b. If the incoming purchase had been shipped free on board destination, what would the correct inventory amount be? c. If the outgoing shipment of merchandise to a customer had been shipped free on board destination, what would the correct inventory amount be. In answering this question, ignore part B and return to the original statement concerning the two shipments. Complete this question by entering your answers in the tabs below. Required B Required C If the outgoing shipment of merchandise to a customer had been shipped free on board destination, what would the correct inventory amount be. In answering this question, ignore part B and return to the original statement concerning the two. shipments. Inventory amount Required A < Required B Required C >
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