At December 31, 2022, Mohling Company's inventory records indicated a balance of $632,000.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)$520,000
B)$626,000
C)$440,000
D)$514,000

Question

At December 31, 2022, Mohling Company's inventory records indicated a balance of $632,000.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)$520,000
B)$626,000
C)$440,000
D)$514,000

Quizplus · Accepted Answer

The correct ending inventory should exclude the $112,000 of inventory purchases not yet received (FOB destination) and the $6,000 of consigned goods. The $74,000 of goods sold should remain in inventory until they reach the destination. Thus, $632,000 - $112,000 - $6,000 = $514,000.

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