Question

Splish Company took a physical inventory on December 31 and determined that goods costing $217,700 were on hand. Not included in the physical count were $26,450 of goods purchased from Pelzer Corporation, f.o.b. shipping point, and $23,320 of goods sold to Alvarez Company for $29,820, f.o.b. destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Splish report as its December 31 inventory?

Answer 1

Answer: $267470

Step-by-step explanation:

Based on the information given in the question, the amount that Splish should report as its December 31 inventory will be:

Goods in hand = $217,700

Add: Goods purchased from Pelzer Corporation = $26,450

Add: Goods sold to Alvarez Company = $23320

Total inventory value = $217,700 + $26,450 + $23320

= $267470

Therefore, the amount that Splish should report as its December 31 inventory will be $267470