Evaluate the correct inventory amount

Assignment Help Financial Accounting

Reference no: EM133146

Question :

Columbia Bank and Trust is considering providing Gallup Company a loan. Before doing so, it decided that further discussions with Gallup's accountant can be desirable. One area of exacting concern is the Inventory account, which has a year-end balance of $275,000. Discussions with the accountant reveal the following.

1. Gallup sold goods costing $55,000 to Bazil Company FOB shipping point on 28^th December. The goods are not expected to reach Brazil until 12^th January. The goods were not added in the physical inventory due to they were not in the warehouse.

2. The physical count of inventory did not add goods costing $95,000 that were shipped to Gallup FOB destination on 27^th December and were still in transit at year-end.

3. Gallup received goods costing $25,000 on January 2. The goods were not added in the physical count.

4. Gallup sold goods costing $51,000 to Lamey of Canada FOB destination on 30^th December. The goods were received in Canada on January 8. They were not added in Gallups physical inventory.

5.Gallup gets goods costing $42,000 on Jan 2 that were shipped FOB destination on Dec 29. The shipment was a rush order that was supposed to arrive Dec 31. This purchase was included in the ending inventory of $275,000.

Evaluate the correct inventory amount on Dec. 31.

Reference no: EM133146

Questions Cloud

Evaluate chis recognized gain or loss on the exchange : Evaluate Chis recognized gain or loss on the exchange.

Evaluate the annual break-even point : Evaluate the annual break-even point, in number of haircuts.

Determine the cost of goods sold amount : Determine the cost of goods sold amount for the three transactions above? Evaluate the gross profit for the three transactions above?

What is the journal entry required to establish the lifo : What is the journal entry required to establish the LIFO reserve for Orange Corporation?

Evaluate the correct inventory amount : Evaluate the correct inventory amount

What are the roles of a group : (a) What is a group (b) What are the roles of a group (a) Outline the three important methodologies of recruitment

Purpose arturo''s journal entry : Purpose Arturo's journal entry to record its acquisition of Westmont.

How does disney describe cash and cash equivalents : How does Disney describe cash and cash equivalents

What are international financial reporting standards : What are International Financial Reporting Standards

User Account

All Pages