Question

Blossom Company took a physical inventory on December 31 and determined that goods costing $250,000 were on hand. Not included in the physical count were $24,800 of goods purchased from Pelzer Corporation, FOB shipping point, and $22,600 of goods sold to Alvarez Company for $31,200, FOB destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end.

1. What amount should Blossom report as its December 31 inventory?

Answer 1

$297,400

Step-by-step explanation:

The computation of the amount of inventory reported is shown below:

= Cost of the goods + goods purchased from Pelzer Corporation, FOB shipping point, + cost of goods sold FOB destination

= $250,000 + $24,800 + $22,600

= $297,400

So this above amount should be considered in order to determine the inventory reported as an ending inventory