The Constance Corporation’s inventory at December 31, 2021, was $134,500 (at cost) based on a physical...

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The Constance Corporation’s inventory at December 31, 2021, was $134,500 (at cost) based on a physical...

The Constance Corporation’s inventory at December 31, 2021, was $134,500 (at cost) based on a physical count of inventory on hand, before any necessary adjustment for the following:

Merchandise costing $24,500, shipped f.o.b. shipping point from a vendor on December 27, 2021, was received by Constance on January 5, 2022.
Merchandise costing $54,500 was shipped to a customer f.o.b. shipping point on December 28, 2021, arrived at the customer’s location on January 6, 2022.
Merchandise costing $30,500 was being held on hand for Jess Company on consignment.
Estimated sales returns are 15% of annual sales. Sales revenue was $569,000 with a gross profit ratio of 20%.

What amount should Constance Corporation report as inventory in its December 31, 2021, balance sheet?

Multiple Choice

a. $196,780.

b. $172,280.

c. $233,405.

d. $226,780.

business accounting

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Answer 1

Answer #1

a.$196,780.

working:

inventory based on physical count	134,500
add: merchandise purchased on FOB basis	24,500
(ignore merchandise sold on FOB basis)
less:inventory held as consignment	(30,500)
add; estimated sales returns (569,000(1-0.20 gross profit)15%)	68,280
smount to be reported as inventory	196,780

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Answer 2

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The Constance Corporation’s inventory at December 31, 2021, was $134,500 (at cost) based on a physical...

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The Constance Corporation’s inventory at December 31, 2021, was $134,500 (at cost) based on a physical...

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The Constance Corporation’s inventory at December 31, 2021, was $134,500 (at cost) based on a physical...

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