Question

Beck Company has inventory of​ $725,000 in its stores as of December 31. It also has two shipments in transit that left the​ suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of​ $210,000 was sold f.o.b. destination and the second shipment of​ $102,000 was sold f.o.b. shipping point. Beck Company also has consigned goods of​ $72,000 awaiting sale with Meyer Company. What amount of inventory should Beck Company report on its balance sheet as of December​ 31?

Answer 1

Answer:

Total Inventory            $899,000

Explanation:

Inventory at hand            $725,000

Inventory in transit     $102,000

Inventory in consignation   $72,000

Total Inventory            $899,000

Notice:

The first cargo is under term FOB destination, which means the goods are still property of the seller, so are not part of Beck company's yet.

While the second cargo is fob shipping point, Beck assume possesion of the gods as soon as they enter the dock.