Reference no: EM133005872

Question - The Kipemba Company has just completed a physical inventory count at year end, December 31, 2019. Only the items on the shelves, in storage, and in the receiving area were counted and amounted to 80,000,000 independent Audit firm discovered the following additional information:

(a) There were goods in transit on December 31, 2019, from a supplier with terms FOB destination, costing Tshs.10,000,000. Because the goods had not arrived, they were excluded from the physical inventory count.

(b) On December 27, 2019, a regular customer purchased goods for cash amounting to Tshs.1,000,000 and had them shipped to a bonded warehouse for temporary storage on December 28, 2019. The goods were shipped via common carrier with terms FOB shipping point. The customer picked the goods up from the warehouse on January 4, 2018. Kipemba Company had paid Tshs.500,000 for the goods and, because they were in storage, Kipemba included them in the physical inventory count.

(c) Kipemba Company, on the date of the inventory, received notice from a supplier that goods ordered earlier, at a cost of Tshs.4,000,000, had been delivered to the transportation company on December 28, 2019; the terms were FOB shipping point. Because the shipment had not arrived on December 31, 2019, it was excluded from the physical inventory.

(d) On December 31, 2019, there were goods in transit to customers, with terms FOB shipping point, amounting to Tshs.800,000 (expected delivery on January 8, 2018). Because the goods had been shipped, they were excluded from the physical inventory count.

(e) On December 31, 2019, Kipemba Company shipped Tshs.2,500,000 worth of goods to a customer, FOB destination. The goods arrived on January 5, 2019. Because the goods were not on hand, they were not included in the physical inventory count.

(f) Kipemba Company, as the consignee, had goods on consignment that cost Tshs.3,000,000. Because these goods were on hand as of December 31, 2019, they were included in the physical inventory count.

Required - Analyze the above information and calculate a corrected amount for the ending inventory. Explain.