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At the end of the period, a physical inventory count of goods actually in the warehouse...

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Accounting

At the end of the period, a physical inventory count of goodsactually in the warehouse showed that West, Inc. had $65,000 ofgoods on hand.West had $24,000 of goods out on consignment with acustomer (West is the consignor) and $17,000 of goods onconsignment from a vendor (West is the consignee). West had apurchase order (West is the buyer) for$8,000 of inventory (FOBdestination) that was still in transit.Finally, West had sold$6,500 of inventory (FOB destination) that was also still intransit. What is the correct amount of ending inventory that Westshould record on its books?

$65,000

$72,000

$73,500

$78,500

$95,500

$86,500


Please explain how you reached the amount

Answer & Explanation Solved by verified expert
4.1 Ratings (565 Votes)

Answer: 73500 $

Calculation of Ending Inventory

                                                                                   (Amounts in $)

Goods in Hand                                                               65000 $

Add: Goods out on Consignment with a Customer      24000 $

Purchase (Goods in Transit)                                            8000 $

Less: Sold out of Transit                                              (6500 $)

Goods on Consignment from a vendor                         (17000 $)

Amount of Ending Inventory                                        73500 $                    
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