Question

Multiple Choice Question 48 As a result of a thorough physical inventory, Marigold Company determined that it had inventory worth $320600 at December 31, 2020. This count did not take into consideration the following facts: Walker Consignment currently has goods worth $47700 on its sales floor that belong to Marigold but are being sold on consignment by Walker. The selling price of these goods is $74100. Marigold purchased $21200 of goods that were shipped on December 27, FOB destination, that will be received by Marigold on January 3. Determine the correct amount of inventory that Marigold should report.

Answer 1

Step-by-step explanation:

Worth of inventory on Dec 31 020 is $320600

Goods sold on consignment will also be included at historical cost and not on the basis of current price because ownership still lies with the company

Total inventory will be thus

320600 + 47700

= $368300 .

Goods to be received later than 31 Dec will not be included in the inventory.

Hence goods purchased worth 21200 will not be included .

Total worth of goods = $368300 .