Ching Inc. took a physical inventory at December 31,2010 and determined that $ ¥ 4,270,000 $ of goods were on hand. On December 29 , the company had ordered $ ¥ 1,010,000 $ of goods which were in transit. The goods were shipped f.o.b. shipping point and arrived on January 2,2011. The company had also sold and shipped f.o.b. destination $ ¥ 950,000 $ worth of inventory on December 28 . The goods arrived at the buyer's place of business on January 4, 2011. Ching's December 31, 2010 statement of financial position will report inventory of

Question

Quizplus · Accepted Answer

The goods in transit shipped f.o.b. shipping point should be included in the inventory, so add $ ¥ 1,010,000 $ to the physical count. The goods sold f.o.b. destination remain in Ching's inventory until they reach the buyer, so they should not be deducted. Thus, the inventory is $ ¥ 4,270,000 + ¥ 1,010,000 = ¥ 5,280,000 $.

Ching Inc Took a Physical Inventory at December 31,2010 and Determined