At December 31 2022 Mohling Company's inventory records indicated a balance of $632000.Upon further investigation it was determined that this amount included the following:
• $112,000 in inventory purchases made by Mohling shipped from the seller 12/27/22 terms FOB destination, but not due to be received until January 2
• $74,000 in goods sold by Mohling with terms FOB destination on December 27. The goods are not expected to reach their destination until January 6
• $6,000 of goods received on consignment from Dollywood Company

What is Mohling's correct ending inventory balance at December 31 2022?
A)$520000
B)$626000
C)$440000
D)$514000

Question

At December 31 2022 Mohling Company's inventory records indicated a balance of $632000.Upon further investigation it was determined that this amount included the following: 
•	$112,000 in inventory purchases made by Mohling shipped from the seller 12/27/22 terms FOB destination, but not due to be received until January 2
•	$74,000 in goods sold by Mohling with terms FOB destination on December 27. The goods are not expected to reach their destination until January 6
•	$6,000 of goods received on consignment from Dollywood Company

What is Mohling's correct ending inventory balance at December 31 2022?
A)$520000
B)$626000
C)$440000
D)$514000

Quizplus · Accepted Answer

The correct ending inventory balance at December 31 2022 is calculated as follows:

Beginning inventory balance = $632,000

Add: Inventory purchases made by Mohling shipped from the seller 12/27/22 and not received until January 2 = $112,000

Less: Goods sold by Mohling with terms FOB destination on December 27 but not expected to reach their destination until January 6 = $74,000

Less: Goods received on consignment from Dollywood Company = $6,000

Correct ending inventory balance = $632,000 + $112,000 - $74,000 - $6,000 = $514,000

Therefore, the best choice is D.

At December 31 2022 Mohling Company's Inventory Records Indicated a Balance