Question

Sunland Company took a physical inventory on December 31 and determined that goods $198,200 were on hand. Not included in the physical count were $26,200 of goods purchased from Pelzer Corporation, f.o.b. shipping point, and $23,410 of goods sold to Alvarez Company for $28,450, f.o.b. destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What costing amount should Sunland report as its December 31 inventory?

December 31 inventory $___________

Answer 1

the amount that should Sunland report as its December 31 inventory is $247,810

Step-by-step explanation:

The computation of the ending inventory is shown below;

Inventory as per physical count $198,200

Add: Purchased goods in transit $26,200

Add: Sold goods in transit $23,410

Inventory to be reported as on December 31 $247,810

Hence, the amount that should Sunland report as its December 31 inventory is $247,810