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At December 31, 2014 Cooper Company's inventory records indicated a balance of $500,000
At December 31, 2014 Cooper Company's inventory records indicated a balance of $500,000. Upon further investigation it was determined that this amount included the following:
- $80,000 in goods sold by Cooper with terms FOB destination on December 27th. The goods are not expected to reach their destination until January 6th.
- $208,000 in inventory purchases made by Cooper shipped from the seller 12/27/14 terms FOB destination, but not due to be received until January 2nd
- $54,000 of goods held on consignment for Dollywood Company
What is Cooper's correct ending inventory balance at December 31, 2014?
$158,000
$238,000
$446,000
$366,000
Expert Solution
Computation of Cooper's correct ending inventory balance at December 31, 2014:
Correct Ending Inventory Balance at December 31, 2014 = Inventory Balance - Purchase in Transit - Consignment Goods
= $500,000-$80,000-$54,000
= $366,000
So, The correct option is 4th "$366,000".
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