First Bank is considering giving Oriole Company a loan. First, however, it decides that it would be a good idea to have further discussions with Oriole's accountant. One area of particular concern is the inventory account, which has a December 31 balance of $309,100. Discussions with the accountant reveal the following: 1. The physical count of the inventory did not include goods that cost $104,500 that were shipped to Oriole, FOB shipping point, on December 27 and were still in transit at year end. 2. Oriole sold goods that cost $38,500 to Ivanhoe 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. 3. On December 31, Grouper Company had $33,550 of goods held on consignment for Oriole. The goods were not included in Oriole's ending inventory balance. 4. Oriole received goods that cost $30,800 on January 2. The goods were shipped FOB shipping point on December 26 by Sheffield Co. The goods were not included in the physical count. Determine the correct inventory amount at December 31. The correct cost of inventory is: Ending inventory-physical count Adjustments: 1. inventory 2. inventory 3. inventory inventory
First Bank is considering giving Oriole Company a loan. First, however, it decides that it would be a good idea to have further discussions with Oriole's accountant. One area of particular concern is the inventory account, which has a December 31 balance of $309,100. Discussions with the accountant reveal the following: 1. The physical count of the inventory did not include goods that cost $104,500 that were shipped to Oriole, FOB shipping point, on December 27 and were still in transit at year end. 2. Oriole sold goods that cost $38,500 to Ivanhoe 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. 3. On December 31, Grouper Company had $33,550 of goods held on consignment for Oriole. The goods were not included in Oriole's ending inventory balance. 4. Oriole received goods that cost $30,800 on January 2. The goods were shipped FOB shipping point on December 26 by Sheffield Co. The goods were not included in the physical count. Determine the correct inventory amount at December 31. The correct cost of inventory is: Ending inventory-physical count Adjustments: 1. inventory 2. inventory 3. inventory inventory
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:First Bank is considering giving Oriole Company a loan. First, however, it decides that it would be a good idea to have further discussions with Oriole's accountant. One area of particular concern is the inventory account, which has a December 31 balance of
$309,100. Discussions with the accountant reveal the following:
1.
The physical count of the inventory did not include goods that cost $104,500 that were shipped to Oriole, FOB shipping point, on December 27 and were still in transit at year end.
2.
Oriole sold goods that cost $38,500 to Ivanhoe 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.
3.
On December 31, Grouper Company had $33,550 of goods held on consignment for Oriole. The goods were not included in Oriole's ending inventory balance.
4.
Oriole received goods that cost $30,800 on January 2. The goods were shipped FOB shipping point on December 26 by Sheffield Co. The goods were not included in the physical count.
Determine the correct inventory amount at December 31.
The correct cost of inventory is:
Ending inventory-physical count
Adjustments:
1.
inventory
2.
inventory
3.
inventory
inventory
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