Question

Bedrock Company reported a December 31 ending inventory balance of $414,500. The following additional information is also available: The ending inventory balance of $414,500 included $72,500 of consigned inventory for which Bedrock was the consignor. The ending inventory balance of $414,500 included $23,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. Based on this information, the correct balance for ending inventory on December 31 is:

Answer 1

The correct balance for Bedrock Company's ending inventory on December 31 is $319,000, after excluding the consigned inventory of $72,500 and office supplies of $23,000 that were incorrectly included.

Step-by-step explanation:

The correct balance for ending inventory on December 31 for Bedrock Company should only include items that are available for sale. The inclusion of $72,500 of consigned inventory, which Bedrock is the consignor for, should not be in the ending inventory because these goods are held by the consignee and are not a part of Bedrock's sellable inventory. Additionally, $23,000 of office supplies should not be included, as they are not intended for sale but are rather company supplies used internally. Therefore, we need to subtract these amounts from the reported ending inventory balance of $414,500 to get the correct ending inventory value. The calculation is $414,500 - $72,500 - $23,000 = $319,000. Thus, the correct balance for ending inventory is $319,000.

Answer 2

$391,500

Step-by-step explanation:

Calculation for what the correct balance for ending inventory on December 31 is:

Using this formula

Ending inventory on December 31=Ending inventory balance-Office supplies

Let plug in the formula

Ending inventory on December 31=$414,500-$23,000

Ending inventory on December 31=$391,500

Therefore the correct balance for ending inventory on December 31 is:$391,500