Question

Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a 15% sales commission on any merchandise sold. During the year, Mogul ships inventory with a cost of $130,000 to Ski Outfit. By the end of the year, $100,000 of the merchandise has been sold to customers for a total of $137,000. What amount of inventory will Mogul report at year end

Answer 1

The amount of inventory Mogul will report at year end is $30,000.

Step-by-step explanation:

The amount of inventory Mogul will report at year end can be calculated as follows:

Costs of goods available for sale = Costs of inventory shipped by Mogul = $130,000

Cost of goods sold = $100,000

Inventory at year end = Costs of goods available for sale - Cost of goods sold = $130,000 - $100,000 = $30,000

Therefore, the amount of inventory Mogul will report at year end is $30,000.