Chau Company just took its physical inventory. The count of inventory items on h
ID: 2355108 • Letter: C
Question
Chau Company just took its physical inventory. The count of inventory items on hand at the company's business locations resulted in a total inventory cost of $301,910. In reviewing the details of the count and related inventory transactions, you have discovered the following. Chau has sent inventory costing $25,040 on consignment to Nikki Company. All of this inventory was at Nikki's showrooms on December 31. The company did not include in the count inventory (cost, $19,690) that was sold on December 28, terms FOB shipping point. The goods were in transit on December 31. The company did not include in the count inventory (cost, $16,050) that was purchased with terms of FOB shipping point. The goods were in transit on December 31. Compute the correct December 31 inventory. $Explanation / Answer
301,910 +25,040 +16,050 = 343,000 answer: 343,000 (THe inventory sold FOB shipping does not belong in the inventory count)