The Constance Corporation's inventory on December 31, 2024, was $134,500 (at cost) based on a physical count of inventory on hand, before any necessary adjustment for the following: Inventory costing $24,500, shipped fo.b. shipping point from a vendor on December 27, 2024, was received by Constance on January 5, 2025. Inventory costing $54,500 was shipped to a customer fo.b, shipping point on December 28, 2024, arrived at the customer's location on January 6, 2025. Inventory costing $30,500 was being held on hand for Jess Company on consignment. Estimated sales returns are 15% of annual sales. Sales revenue was $569,000 with a gross profit ratio of 20% What amount should Constance Corporation report as inventory in its December 31, 2024, balance sheet? Multiple Choice $196,780 O. $172.280 $233,405 $226,780

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…