Sherman,Inc.counted its ending inventory as $178,000 at year-end,January 31,2017.Upon review of the records,it was noted that the following items were in transit during the count: ?
A) $\$ 2,000$ of goods shipped by a supplier to Sherman sent FOB destination point on January 31 were received February 5 , and were not counted by Sherman.

B) $\$ 5,000$ of goods shipped by a supplier to Sherman sent FOB shipping point on January 30 were received February 2, and were not counted by Sherman.

C) $\$ 6,000$ of goods shipped by Sherman to a customer sent FOB shipping point on January 31 were received February 3 , and were counted by Sherman. Determine the correct inventory balance at January 31.
A)$178,000
B)$177,000
C)$174,000
D)$172,000

Question

Sherman,Inc.counted its ending inventory as $178,000 at year-end,January 31,2017.Upon review of the records,it was noted that the following items were in transit during the count: ?
A) $\$ 2,000$ of goods shipped by a supplier to Sherman sent FOB destination point on January 31 were received February 5 , and were not counted by Sherman.

B) $\$ 5,000$ of goods shipped by a supplier to Sherman sent FOB shipping point on January 30 were received February 2, and were not counted by Sherman.

C) $\$ 6,000$ of goods shipped by Sherman to a customer sent FOB shipping point on January 31 were received February 3 , and were counted by Sherman. Determine the correct inventory balance at January 31.
A)$178,000
B)$177,000
C)$174,000
D)$172,000

Quizplus · Accepted Answer

The items in transit should not be included in the ending inventory since they were not physically present at the time of the count. Therefore, the correct inventory balance at January 31 would be $177,000 ($178,000 - the value of the items in transit).

Sherman,Inc $2,000\$ 2,000$2,000 Of Goods Shipped by a Supplier to Sherman Sent FOB

Sherman,Inc $\$ 2,000$ Of Goods Shipped by a Supplier to Sherman Sent FOB