Question

Tri-State Bank and Trust is considering giving Metlock, Inc. a loan. Before doing so, management decides that further discussions with Metlock's accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of $290,900. Discussions with the accountant reveal the following: 1. Metlock sold goods costing $31,300 to Sorci Company, FOB shipping point, on December 28. The goods are not expected to arrive at Sorci until January 12 The goods were not included in the physical inventory because they were not in the warehouse 2. The physical count of the inventory did not include goods costing $95,600 that were shipped to Metlock FOB destination on December 27 and were still in transit at year-end. 3. Metlock received goods costing $23,900 on January 2. The goods were shipped FOB shipping point on December 26 by Solita Co. The goods were not included in the physical count. 4. Metlock sold goods costing $39,700 to Natali Co.FOB destination, on December 30. The goods were received at Natalion January 8. They were not included in Metlock's physical inventory, 5. Metiock received goods costing $49.200 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $290,900. Determine the correct inventory amount on December 31 Correct inventory s

Answer 1

Inventory as reported	290900
1	0	Correctly not included as ownership has been transferred
2	0	Correctly not included as ownership has not been transferred to Metlock
3	23900	To be included as ownership has been transferred to Metlock
4	39700	To be included as ownership has been not transferred to Natali
5	-49200	Not to be included as ownership has not been transferred to Metlock
Correct inventory	305300