Assume that the total inventory on hand at the end of the year as determined by taking a physical inventory is $62,000. Of the $62,000, $8,000 has been sold FOB destination and is awaiting pickup by the carrier. What is the cost of inventory reported on the balance sheet?

Question

Quizplus · Accepted Answer

The cost of inventory reported on the balance sheet should be $62,000. This is because the $8,000 of inventory sold FOB destination, although sold, is still in the possession of the company and awaiting pickup by the carrier. Therefore, it is still considered part of the company's inventory until it is physically transferred to the buyer.

Assume That the Total Inventory on Hand at the End