Umatilla Bank and Trust is considering giving Blossom Company a loan. Before doing so, it decides that further discussions with Blossom's accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $250,820. Discussions with the accountant reveal the following: 1. Blossom shipped goods costing $54,230 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock 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 $91,590 that were shipped to Blossom FOB destination on December 27 and were still in transit at year-end. 3. Blossom received goods costing $24,420 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count. 4. Blossom shipped goods costing $56,030 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Blossom's physical inventory. 5. Blossom received goods costing $39,190 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 $250,820. Determine the correct inventory amount on December 31.
Umatilla Bank and Trust is considering giving Blossom Company a loan. Before doing so, it decides that further discussions with Blossom's accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $250,820. Discussions with the accountant reveal the following: 1. Blossom shipped goods costing $54,230 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock 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 $91,590 that were shipped to Blossom FOB destination on December 27 and were still in transit at year-end. 3. Blossom received goods costing $24,420 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count. 4. Blossom shipped goods costing $56,030 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Blossom's physical inventory. 5. Blossom received goods costing $39,190 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 $250,820. Determine the correct inventory amount on December 31.
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 13P
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Determine the correct inventory amount on December 31.
Transcribed Image Text:Umatilla Bank and Trust is considering giving Blossom Company a loan.
Before doing so, it decides that further discussions with Blossom's
accountant may be desirable. One area of particular concern is the
Inventory account, which has a year-end balance of $250,820.
Discussions with the accountant reveal the following:
1. Blossom shipped goods costing $54,230 to Hemlock Company FOB
shipping point on December 28. The goods are not expected to reach
Hemlock 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
$91,590 that were shipped to Blossom FOB destination on December
27 and were still in transit at year-end.
3. Blossom received goods costing $24,420 on January 2. The goods
were shipped FOB shipping point on December 26 by Yanice Co. The
goods were not included in the physical count.
4. Blossom shipped goods costing $56,030 to Ehler of Canada FOB
destination on December 30. The goods were received in Canada on
January 8. They were not included in Blossom's physical inventory.
5. Blossom received goods costing $39,190 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 $250,820.
Determine the correct inventory amount on December 31.
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