First Bank is considering giving Cullumber Company a loan. First, however, it decides that it would be a good idea to have further discussions with Cullumber's accountant. One area of particular concern is the inventory account, which has a December 31 balance of $236,040. Discussions with the accountant reveal the following: 1. 2. 3. 4. The physical count of the inventory did not include goods that cost $79,800 that were shipped to Cullumber, FOB shipping point, on December 27 and were still in transit at year end. Cullumber sold goods that cost $29,400 to Oriole Company, FOB destination, on December 28. The goods are not expected to arrive at their destination in India until January 12. The goods were not included in the physical inventory because they were not in the warehouse. On December 31, Indigo Company had $25,620 of goods held on consignment for Cullumber. The goods were not included in Cullumber's ending inventory balance. Cullumber received goods that cost $23,520 on January 2. The goods were shipped FOB shipping point on December 26 by Bramble Co. The goods were not included in the physical count.

First Bank is considering giving Cullumber Company a loan. First, however, it decides that it would be a good idea to have further discussions with Cullumber's accountant. One area of particular concern is the inventory account, which has a December 31 balance of $236,040. Discussions with the accountant reveal the following: 1. 2. 3. 4. The physical count of the inventory did not include goods that cost $79,800 that were shipped to Cullumber, FOB shipping point, on December 27 and were still in transit at year end. Cullumber sold goods that cost $29,400 to Oriole Company, FOB destination, on December 28. The goods are not expected to arrive at their destination in India until January 12. The goods were not included in the physical inventory because they were not in the warehouse. On December 31, Indigo Company had $25,620 of goods held on consignment for Cullumber. The goods were not included in Cullumber's ending inventory balance. Cullumber received goods that cost $23,520 on January 2. The goods were shipped FOB shipping point on December 26 by Bramble Co. The goods were not included in the physical count.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter7: Accounting Information Systems

Section: Chapter Questions

Problem 10MC: The company just took a physical count of inventory and found $75 worth of inventory was unaccounted...

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First Bank is considering giving Cullumber Company a loan. First, however, it decides that it would be a good idea to have further discussions with Cullumber’s accountant. One area of particular concern is the inventory account, which has a December 31 balance of $280,000. Discussions with the accountant reveal the following: 1. The physical count of the inventory did not include goods that cost $91,000 that were shipped to Cullumber, FOB shipping point, on December 27 and were still in transit at year end. 2. Cullumber sold goods that cost $37,000 to Oriole, FOB destination, on December 28. The goods are not expected to arrive at their destination in India until January 12. The goods were not included in the physical inventory because they were not in the warehouse. 3. On December 31, Indigo had $32,000 of goods held on consignment for Cullumber. The goods were not included in Cullumber’s ending inventory balance. 4. Cullumber received goods that cost $28,500 on…
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