Question

Bedrock Company reported a December 31 ending inventory balance of $415,500. The following additional information is also available:

• The ending inventory balance of $415,500 included $73,900 of consigned inventory for which Bedrock was the consignor.
• The ending inventory balance of $415,500 included $25,800 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.

Based on this information, the correct balance for ending inventory on December 31 is:

• The ending inventory balance of $415,500 included $73,900 of consigned inventory for which Bedrock was the consignor.
• The ending inventory balance of $415,500 included $25,800 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.

Based on this information, the correct balance for ending inventory on December 31 is:

2. A company purchased $3,950 worth of merchandise. Transportation costs were an additional $350. The company returned $270 worth of merchandise and then paid the invoice within the 1% cash discount period. The total cost of this merchandise is:

Answer 1

Requirement 1

The inventory shall include consigned goods for which the company is consignor. As it is correct, no adjustment is required.

However, inventory shall not include supplies which is held for use and thus should be deducted.

Particulars	Amount ($)
Beginning inventory	415,500
Less: Issued for supplies	25,800
Ending inventory	389,700

Requirement 2

Particulars	Amount ($)
Purchase cost	3950
Less: purchase returned	270
Net purchases	3680
Less: Cash discount at 1%	36.8
Add: transport cost	350
Total cost of merchandise	3993.2