Sandoval needs to determine its year-end inventory.The warehouse contains 20,000 units,of which 3,000 were damaged by flood and are not sellable.Another 2,000 units were purchased from Markor Company,FOB shipping point,and are currently in transit.The company also consigns goods and has 4,000 units at a consignee's location.How many units should Sandoval include in its year-end inventory?
A)29,000
B)21,000
C)23,000
D)19,000
E)26,000

Question

Quizplus · Accepted Answer

To determine the year-end inventory, we need to include the units that are available for sale.

- The 3,000 units that were damaged by flood are not sellable, so we should exclude them from the inventory count.
- The 2,000 units that are currently in transit are not yet in the warehouse and therefore cannot be sold. We should also exclude them from the inventory count.
- The 4,000 units at the consignee's location are not owned by Sandoval until they are sold, so we should exclude them from the inventory count as well.

Therefore, the units that should be included in the year-end inventory count are:

20,000 - 3,000 (damaged) + 0 (in transit) - 4,000 (consignment) = 23,000

So, the best choice is C) 23,000.

Sandoval Needs to Determine Its Year-End Inventory