Per its January 31, 2017 physical inventory count, Pugwash Company has $24,500 in inventory on hand at year end. In addition, at year end the company has $1,200 in merchandise in transit purchased from a supplier shipped FOB destination. Included in its physical inventory is $900 in goods held on consignment for a local manufacturer. How much inventory should be reported on the company's January 31, 2017 balance sheet?

Question

Quizplus · Accepted Answer

The inventory should exclude the $900 consigned goods and not include the $1,200 in transit since they are FOB destination. Thus, $24,500 - $900 = $23,600.

Per Its January 31, 2017 Physical Inventory Count, Pugwash Company