Question

As a result of a thorough physical inventory, Railway Company determined that it had inventory worth $180,000 at December 31. This count did not take into consideration the following facts: Rogers Consignment store currently has goods worth $35,000 on its sales floor that belong to Railway but are being sold on consignment by Rogers. The selling price of these goods is $50,000. Railway purchased $13,000 of goods that were shipped on December 27, FOB destination, that will be received by Railway on January 3. Determine the correct amount of inventory that Railway should report on its December 31 balance sheet.

Answer 1

$215,000

Step-by-step explanation:

Data provided as per the question below:-

Inventory = $180,000

Goods = $35,000

The computation of amount of inventory is as shown below:-

Amount of Inventory = Inventory + Goods

= $180,000 + $35,000

= $215,000

Therefore, for computing the amount of inventory that Railway should report on its December 31 balance sheet. we simply added inventory with goods.