Tri-State Bank and Trust is considering giving Cheyenne Corp. a loan. Before doing so, management decides that further discussions with Cheyenne’s accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of $303,500. Discussions with the accountant reveal the following. 1. Cheyenne shipped goods costing $32,400 to Sorci Company, FOB shipping point, on December 28. The goods are not expected to arrive at Sorci until January 12. The goods were not included in the physical inventory because they were not in the warehouse. 2. The physical count of the inventory did not include goods costing $91,000 that were shipped to Cheyenne FOB destination on December 27 and were still in transit at year-end. 3. Cheyenne received goods costing $29,800 on January 2. The goods were shipped FOB shipping point on December 26 by Solita Co. The goods were not included in the physical count. 4. Cheyenne shipped goods costing $44,000 to Natali Co., FOB destination, on December 30. The goods were received at Natali on January 8. They were not included in Cheyenne's physical inventory. 5. Cheyenne received goods costing $44,400 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $303,500. Determine the correct inventory amount on December 31.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Tri-State Bank and Trust is considering giving Cheyenne Corp. a loan. Before doing so, management decides that further discussions with Cheyenne’s accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of $303,500. Discussions with the accountant reveal the following.

1.		Cheyenne shipped goods costing $32,400 to Sorci Company, FOB shipping point, on December 28. The goods are not expected to arrive at Sorci until January 12. The goods were not included in the physical inventory because they were not in the warehouse.
2.		The physical count of the inventory did not include goods costing $91,000 that were shipped to Cheyenne FOB destination on December 27 and were still in transit at year-end.
3.		Cheyenne received goods costing $29,800 on January 2. The goods were shipped FOB shipping point on December 26 by Solita Co. The goods were not included in the physical count.
4.		Cheyenne shipped goods costing $44,000 to Natali Co., FOB destination, on December 30. The goods were received at Natali on January 8. They were not included in Cheyenne's physical inventory.
5.		Cheyenne received goods costing $44,400 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $303,500.

Determine the correct inventory amount on December 31.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

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.

Similar questions