Question

The inventory on hand of Hayes Company at the end of 2020 determined by physical count is $105,400. The following items were not included in this inventory amount.

a. Purchased goods in transit with the terms FOB shipping point, invoice $4100 plus freight $240.

b.Goods on out on consignment to Marlman Company, retail sales price $4200.

c. Goods sold to Grina Inc. with terms FOB destination invoiced for $1900. Freight to deliver the goods was $150 and the goods were still in transit at December 31 to the customer.

d.Goods held on consignment by Hayes Company from Martin Company at a retail sales price of $2700 which includes a sales commission of 20% of the selling price.

e. Purchased goods in transit, with the terms FOB Destination, invoice price $2100 which included freight charges of $180.

Instructions: Prepare a schedule that determines the balance of the ending inventory at December 31, 2020 that shows the balance Hayes would report on their balance sheet. Hayes uses a selling price of 140% on the cost of goods. Hint: You need to reduce the retail sales price to cost, as applicable. Show supporting computations as necessary.

Answer 1

Page-1 let the cost price be 100 sale price = 140% of Cost price : sale price = 140 i profit = 40 a proft = 404 of Cost price. Particular Amount ! value of inventory determined by 2 physical count $ 105,400 (+) purchased I terms goods in FOR. transit with 2 J $4100+ $9240 € = $4340 (+) Value of goodh nent on Consignment 2 to Marlman Company, retail price $9200 J = $42008 100 T40 = $ 3000 $2,100. (4) purchaned good in transit, with FOR 2 tam, invoice price $2100 including I freight of $180 Inventory Value to be reported on their balance sheet date $ 114,840 Notes: 1) Goods sold on For do not form part of inventory. 112) Goods held as consignment are not a part I of Consigneen inventory but should be included in consignon inventory.