Question

the sheridan hat shop limited counted the entire inventory in its store on august 31 and arrived at a total inventory cost of 89,000. the cost included 7000 of inventory held on consignment for a local designer. calculate the correct cost of the inventory on august 31

Answer 1

The Sheridan Hat Shop Limited's correct inventory cost on August 31 is $82,000 after subtracting the $7,000 of consignment inventory from the initially counted total of $89,000.

Step-by-step explanation:

The Sheridan Hat Shop Limited needs to calculate the correct cost of the inventory on August 31. The initial count included inventory held on consignment, which should not be part of the shop's inventory value. The total inventory cost calculated was $89,000, but this included $7,000 of consignment inventory. To find the correct inventory cost, we must subtract the consignment inventory from the total.

Correct Inventory Cost = Total Inventory Cost - Consignment Inventory Cost

Therefore, the correct cost of the inventory on August 31 would be:

Correct Inventory Cost = $89,000 - $7,000 = $82,000