Question

As a result of a thorough physical inventory, Oriole Company determined that it had inventory worth $320300 at December 31, 2018. This count did not take into consideration the following facts: Herschel Consignment currently has goods worth $47200 on its sales floor that belong to Oriole but are being sold on consignment by Herschel. The selling price of these goods is $75300. Oriole purchased $21700 of goods that were shipped on December 27, FOB destination, that will be received by Oriole on January 3. Determine the correct amount of inventory that Oriole should report.

Answer 1

Answer: $367500

Step-by-step explanation:

The correct amount of inventory that Oriole should report is calculated below:

Worth of inventory per physical verification = $320300

Add: Cost of goods that are consigned to Herschel Corporation = $47200

Therefore, the amount of inventory that Oriole should report will be the addition of the inventory worth and the cost of goods consigned to Herschel:

= $320300 + $47200

= $367500