Question

Bell Inc. took a physical inventory at the end of the year and determined that $780,000 of goods were on hand.

In addition, Bell, Inc. determined that $60,000 of goods that were in transit that were shipped f.o.b. shipping point were actually received two days after the inventory count and that the company had $90,000 of goods out on consignment.

What amount should Bell report as inventory at the end of the year?
a. $780,000.b. $840,000.c. $870,000.d. $930,000.

Answer 1

Option (c) is correct.

Step-by-step explanation:

Given that,

Physical inventory at the end of the year and determined = $780,000 of goods were on hand

Shipped f.o.b. shipping point = $60,000

Goods out on consignment = $90,000

Bell report as inventory at the end of the year as follows:

= Physical inventory determined + Goods on consignment

= $780,000 + $90,000

= $870,000