Bellingham Inc. took a physical inventory at the end of the year and calculated that £1,450,000 of goods were on hand. Bellingham determined that £25,000 of goods were in transit. The goods were shipped F.o.b. shipping point and were received by Bellingham two days after the inventory count. The company also had £275,000 of goods out on consignment. What amount should Bellingham report for inventory on its statement of financial position?
A) £1,150,000.
B) £1,450,000.
C) £1,725,000.
D) £1,750,000.

Question

Quizplus · Accepted Answer

Goods shipped F.o.b. shipping point should be included in the inventory as they are considered owned by Bellingham once shipped. Additionally, goods out on consignment should also be included in the inventory. Therefore, the inventory should include the physical count (£1,450,000), the goods in transit (£25,000), and the consignment goods (£275,000), totaling £1,750,000.