Helsinki Furniture Sales uses the periodic inventory system. On April 30, 2014, the company's year end, a physical count was taken of the inventory on hand in both the warehouse and the retail store area for the purpose of determining cost of goods sold and ending inventory value. The preliminary inventory list prepared by the warehouse manager shows a total inventory on hand of $738,000. The following are items that the warehouse manager noted on a separate sheet. None of these items are currently part of the final inventory listing because the manager was not sure how they should be treated for inventory purposes.
1. On April 30, Helsinki shipped an order to a customer, FOB shipping point. The cost of the goods shipped is $9,650. Freight, which is to be paid by the appropriate party, will cost $375.
2. On April 30, a customer visited Helsinki's shop and selected a desk that she wanted to purchase and paid for it in full. The sales price of the desk was $3,500, and the cost was $2,200. The customer intends to send a truck to pick up the desk no later than May 2. The freight will cost $50 and will be paid by the customer. A "Sold" sign has been placed on the desk but it is still on display in the store.
3. Residing in Helsinki's warehouse is furniture costing $21,000 that was purchased in April and needs to be returned. The goods were special ordered for a customer who has since decided not to buy them after all. Helsinki's supplier has agreed to accept return of the goods and will allow a full credit on Helsinki's account as soon as they are received. A freight company is scheduled to pick up the merchandise on the morning of May 1, and so they have been set aside near the loading dock. The freight, which will be paid by the customer as a fee for the cancellation, is to cost $300.
4. Helsinki sells some of its merchandise in smaller towns by placing samples on consignment with local hardware stores. The manager noted that 15 desks at a cost of $1,200 each and 30 chairs at $75 each are currently out on consignment.
5. On May 2, a freight company delivered goods that cost $65,000 to Helsinki's warehouse. The goods had been shipped by the vendor on April 29, FOB destination. Freight on this shipment will amount to $400 and will be paid by the appropriate party.
Instructions
Calculate the correct inventory balance at April 30, 2014. For each of the above items, explain the basis of your treatment of the item.

Question

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The Answer of Helsinki Furniture Sales uses the periodic inventory system. On April 30, 2014, the company's year end, a physical count was taken of the inventory on hand in both the warehouse and the retail store area for the purpose of determining cost of goods sold and ending inventory value. The preliminary inventory list prepared by the warehouse manager shows a total inventory on hand of $738,000. The following are items that the warehouse manager noted on a separate sheet. None of these items are currently part of the final inventory listing because the manager was not sure how they should be treated for inventory purposes.
1. On April 30, Helsinki shipped an order to a customer, FOB shipping point. The cost of the goods shipped is $9,650. Freight, which is to be paid by the appropriate party, will cost $375.
2. On April 30, a customer visited Helsinki's shop and selected a desk that she wanted to purchase and paid for it in full. The sales price of the desk was $3,500, and the cost was $2,200. The customer intends to send a truck to pick up the desk no later than May 2. The freight will cost $50 and will be paid by the customer. A "Sold" sign has been placed on the desk but it is still on display in the store.
3. Residing in Helsinki's warehouse is furniture costing $21,000 that was purchased in April and needs to be returned. The goods were special ordered for a customer who has since decided not to buy them after all. Helsinki's supplier has agreed to accept return of the goods and will allow a full credit on Helsinki's account as soon as they are received. A freight company is scheduled to pick up the merchandise on the morning of May 1, and so they have been set aside near the loading dock. The freight, which will be paid by the customer as a fee for the cancellation, is to cost $300.
4. Helsinki sells some of its merchandise in smaller towns by placing samples on consignment with local hardware stores. The manager noted that 15 desks at a cost of $1,200 each and 30 chairs at $75 each are currently out on consignment.
5. On May 2, a freight company delivered goods that cost $65,000 to Helsinki's warehouse. The goods had been shipped by the vendor on April 29, FOB destination. Freight on this shipment will amount to $400 and will be paid by the appropriate party.
Instructions
Calculate the correct inventory balance at April 30, 2014. For each of the above items, explain the basis of your treatment of the item.

Helsinki Furniture Sales Uses the Periodic Inventory System