Question

At December 31, 2017 Pharoah Company's inventory records indicated a balance of $629000. Upon further investigation it was determined that this amount included the following:▪ $122000 in inventory purchases made by Pharoah shipped from the seller 12/27/17 terms FOB destination, but not due to be received until January 2nd▪ $80000 in goods sold by Pharoah with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th▪ $7000 of goods received on consignment from Concord CompanyWhat is Pharoah correct ending inventory balance at December 31, 2017?

Answer 1

$500000

Step-by-step explanation:

*Company's inventory records at the begining of the period.

$629000

*Must be substracted the inventory purchases made by Pharoah shipped from the seller 12/27/17 terms FOB destination, but not due to be received until January 2nd, because it is not yet in power of the company.

- $122000

*Must be substracted the goods received on consignment from Concord Company, because they are not inventory for Pharoah Company.

- $7000

$629000 - $122000 - $7000 = $500000