Reference no: EM13553375

During the first month of operations, ABC Company incurred the following costs in ordering and receiving merchandise for resale. No inventory was sold.

List price, $100, 200 units purchased
Volume discount, 10% off list price
Paid freight costs, $56
Insurance cost while goods were in transit, $32
Long-distance phone charge to place orders, $4.35
Purchasing department salary, $1,000
Supplies used to label goods at retail price, $9.75
Interest paid to supplier, $46

Required

What amount do you recommend the company record as merchandise inventory on its balance sheet? Explain your answer. For any items not to be included in inventory, indicate their appropriate treatment in the financial statements.