Hunter Bank and Trust is considering giving Gama Company a loan. Hunter Bank and Trust is not sure about whether the inventory account’s 2016 year-end balance in Gama company is £1,188,000. Discussionswith the accountant reveal the following information.Gama company received from Alpha Inc. goods costing £100,000 on January 3, 2017. Alpha Inc. shipped the goods, under the term of FOB shipping point, on December 27,2016 to Gama Company. The goods were not included in the physical count.Gama Company received goods costing £176,000 on January 4, 2017 that were shipped, under the term of FOB shipping point, by ABC Company on December 30, 2016. The shipment was a rush order that was supposed to arrive December 31, 2016. This purchase was included in the ending inventory of £1,188,000.Gama company sold goods costing £152,000 to Grand Company, under the term of FOB shipping point, on December 27, 2016. The goods were not expected to arrive at Grand until January 10, 2017. These goods were not included in the physical inventory because they were not in the warehouse.Gama sold goods costing £140,000 to Lora Co., under the term of FOB destination, on December 30, 2016. The goods were received by Lora on January 8, 2017. They were not included in Gama Company’s inventory.The physical count of the inventory did not include goods costing £364,000 that were bought from OCAM Company. OCAM Company shipped the goods to Gama Company, under the term of FOB destination on December 27, 2016 and were still in transit at 2016 year-end. InstructionsDetermine the correct inventory amount on December 31. (Show your computation)

Name: Hunter Bank and Trust is considering giving Gama Company a loan. Hunte
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Description: Hunter Bank and Trust is considering giving Gama Company a loan. Hunter Bank and Trust is not sure about whether the inventory account’s 2016 year-end balance in Gama company is £1,188,000. Discussionswith the accountant reveal the following informat

Statement showing Inventory Amount as on 31,Dec,2016. S.NO…

Answered: unter Bank and Trust is considering…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Hunter Bank and Trust is considering giving Gama Company a loan. Hunter Bank and Trust is not sure about whether the inventory account’s 2016 year-end balance in Gama company is £1,188,000. Discussions
with the accountant reveal the following information.

Gama company received from Alpha Inc. goods costing £100,000 on January 3, 2017. Alpha Inc. shipped the goods, under the term of FOB shipping point, on December 27,2016 to Gama Company. The goods were not included in the physical count.
Gama Company received goods costing £176,000 on January 4, 2017 that were shipped, under the term of FOB shipping point, by ABC Company on December 30, 2016. The shipment was a rush order that was supposed to arrive December 31, 2016. This purchase was included in the ending inventory of £1,188,000.
Gama company sold goods costing £152,000 to Grand Company, under the term of FOB shipping point, on December 27, 2016. The goods were not expected to arrive at Grand until January 10, 2017. These goods were not included in the physical inventory because they were not in the warehouse.
Gama sold goods costing £140,000 to Lora Co., under the term of FOB destination, on December 30, 2016. The goods were received by Lora on January 8, 2017. They were not included in Gama Company’s inventory.
The physical count of the inventory did not include goods costing £364,000 that were bought from OCAM Company. OCAM Company shipped the goods to Gama Company, under the term of FOB destination on December 27, 2016 and were still in transit at 2016 year-end.

Instructions
Determine the correct inventory amount on December 31. (Show your computation)

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