The physical count of the inventory of Great Goods Company on December 31 was determined as a total of $62,500 without considering the following items: On December 27, Great Goods Company shipped merchandise with a cost of $3,400 to a customer F.O.B. destination. The merchandise was still in transit on December 31. Great Goods had not recorded the sale. The company had $3,000 of merchandise out on consignment with Sales Emporium. Great Goods Company purchased merchandise on credit with a cost of $6,000 on December 28. The merchandise (in transit) was shipped F.O.B. shipping point. The company shipped merchandise with a cost of $4,000 to a customer F.O.B. shipping point. The merchandise was still in transit on December 31. Great Goods sold merchandise inventory costing the company $575 on December 29 and is holding the goods for customer pick up scheduled for January 2. The sale has been recorded. What is the correct amount of inventory Great Goods Company has on December 31?
The physical count of the inventory of Great Goods Company on December 31 was determined as a total of $62,500 without considering the following items: On December 27, Great Goods Company shipped merchandise with a cost of $3,400 to a customer F.O.B. destination. The merchandise was still in transit on December 31. Great Goods had not recorded the sale. The company had $3,000 of merchandise out on consignment with Sales Emporium. Great Goods Company purchased merchandise on credit with a cost of $6,000 on December 28. The merchandise (in transit) was shipped F.O.B. shipping point. The company shipped merchandise with a cost of $4,000 to a customer F.O.B. shipping point. The merchandise was still in transit on December 31. Great Goods sold merchandise inventory costing the company $575 on December 29 and is holding the goods for customer pick up scheduled for January 2. The sale has been recorded. What is the correct amount of inventory Great Goods Company has on December 31?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
The physical count of the inventory of Great Goods Company on December 31 was determined as a total of $62,500 without considering the following items: On December 27, Great Goods Company shipped merchandise with a cost of $3,400 to a customer F.O.B. destination. The merchandise was still in transit on December 31. Great Goods had not recorded the sale. The company had $3,000 of merchandise out on consignment with Sales Emporium. Great Goods Company purchased merchandise on credit with a cost of $6,000 on December 28. The merchandise (in transit) was shipped F.O.B. shipping point. The company shipped merchandise with a cost of $4,000 to a customer F.O.B. shipping point. The merchandise was still in transit on December 31. Great Goods sold merchandise inventory costing the company $575 on December 29 and is holding the goods for customer pick up scheduled for January 2. The sale has been recorded. What is the correct amount of inventory Great Goods Company has on December 31?
Expert Solution
Step 1 Introduction
The inventory at end shows the balance of inventory which belongs to the business, even if it is in transit but the ownership is not given to the buyer yet.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education