Question

Bedrock Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available: The ending inventory balance of $412,000 included $73,200 of consigned inventory for which Bedrock was the consignor. The ending inventory balance of $412,000 included $24,400 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. Based on this information, the correct balance for ending inventory on December 31 is: Multiple Choice $303,000 $358,400 $387,600 $338,600 $241,000

Answer 1

Bedrock Company

Ending Inventory is $387,600.

Step-by-step explanation:

The inventory already includes the consigned inventory. Since, Bedrock the consignor, its inclusion is correct. In consignment accounting, consigned inventory belongs to the consignor, who is the legal owner. The consignee is only in physical possession and not the legal owner.

The ending inventory should not include office supplies since they would be used during the coming year.