Reference no: EM132251776

Question - The Cain Co has just completed a physical inventory count at year end. Only the items on the shelves, in storage and in the receiving area were counted and costed on the FIFO basis. The inventory amounted to $80,000.

During the audit, the independent CPA discovered the following additional information:

a. There were goods in transit on 12/31 from a supplier with terms FOB destination, costing $10,000. Because the goods had not arrived, they were excluded from the inventory count.

b. On 12/27 a regular customer purchased goods for cash amounting to $1,000 and had them shipped to a bonded warehouse for temporary storage on 12/28. The goods were shipped with terms FOB shipping point. The customer picked the goods up on 01/04. Cain Co had paid $500 for the goods and, because they were in storage, Cain included them in the inventory count.

c. Cain Co, on the date of the inventory, received notice from a supplier that goods ordered earlier, at a cost of $4,000, had been delivered to the transportation company on 12/28. The terms were FOB shipping point. Because the shipment had not arrived on 12/31, it was excluded from the inventory count.

d. On 12/31 there were goods in transit to customers, with terms FOB shipping point, amounting to $800, expected to arrive at the customer's on 01/08. Because the goods had been shipped, there were excluded from the inventory count.

e. On 12/31 Cain Co shipped $2,500 worth of goods to a customer, FOB destination. The goods arrived on 01/05. Because the goods were not on hand, they were not included in the inventory count.

f. Cain Co, as the consignee, had goods on consignment that cost $3,000. Because these goods were on hand, they were included in the inventory count.

Analyze the above information and calculate a corrected amount for the value of the ending inventory.