Reference no: EM132941131

Modern Office Furniture Sales is located in regional Victoria and uses the perpetual inventory system to record purchases and sales of inventory. Modern Office Furniture Sales is registered for GST.

The inventory ledger account showed a balance at 30 June 2021 of $320,200. However, an inventory count on 30 June 2021 revealed inventory on hand of $350,100.

You have been asked to review the business records which revealed the following in regard to inventory:

• Goods on consignment from a manufacturer valued at $13,750 (including GST) were in the shop on 30 June 2021 and included in the physical inventory count but not recorded in the inventory subsidiary ledger.
• Goods valued at $8,360 (including GST) were shipped by Modern Office Furniture Sales supplier on DDP terms on 28 June 2021 and were expected to reach Modern Office Furniture Supplies warehouse on 3 July 2021. The goods in transit were included in the physical inventory count but not yet recorded in the business records as the invoice had not yet been received.
• A sales invoice for $21,340 (including GST) for goods shipped to a Geelong customer on ExW terms on 27 June 2021 was recorded in the business records. The goods are expected to reach the customer on 2 July 2021. The goods value of $11,640 (excluding GST) were recorded as sold but included in the physical inventory count.

Problem a. For each of the above, what is the effect on inventory on hand at 30 June 2021?

Problem b. What is the correct value of inventory on hand at 30 June 2021?