As a result of a thorough physical inventory Greeley Company determined that it had inventory worth $325000 at December 31 2016. This count did not take into consideration the following facts: Walker Consignment currently has goods worth $47000 on its sales floor that belong to Greeley but are being sold on consignment by Walker. The selling price of these goods is $75000. Greeley purchased $22000 of goods that were shipped on December 27. FOB destination that will be received by Greeley on January 3. Determine the correct amount of inventory that Greeley should report.

Question

Quizplus · Accepted Answer

To determine the correct amount of inventory that Greeley should report, we need to make the following adjustments to the physical inventory count of $325,000:
- Add the value of goods on consignment at Walker Consignment ($47,000)
- Add the cost of goods purchased FOB destination and in transit at year-end ($22,000)

Therefore, the correct amount of inventory that Greeley should report is:
$325,000 + $47,000 + $22,000 = $394,000

However, the question specifically asks for the inventory that Greeley should report. This means that we should only include the selling price of consigned goods, not the value ($47,000). Therefore, the correct amount of inventory that Greeley should report is:
$325,000 + $75,000 + $22,000 = $372,000

Therefore, the best choice is C. $372,000.

As a Result of a Thorough Physical Inventory Greeley Company