Irwin Company counted its ending inventory as $178,000 at year-end, January 31, 2013. Upon review of the records, it was noted that the following items were in transit during the count: - Goods totaling $2,000 shipped by the supplier FOB destination on January 31 were received February 5th and were not counted by Irwin Company.
- Goods totaling $5,000 shipped by the supplier FOB shipping point on January 30 were received February 2nd and were not counted by Irwin Company.
- Goods totaling $6,000 shipped by Irwin Company to a customer FOB shipping point on January 31 were received by the customer on February 3rd and were counted by Irwin Company.
What is Irwin Company's correct inventory balance on January 31, 2013?

Question

Quizplus · Accepted Answer

The correct inventory balance on January 31, 2013, would be the ending inventory balance of $178,000, minus the goods that were shipped FOB destination on January 31 and received on February 5 ($2,000), and the goods that were shipped FOB shipping point on January 30 and received on February 2 ($5,000), plus the goods that were shipped FOB shipping point on January 31 and received by the customer on February 3 ($6,000). 
Therefore, the correct inventory balance would be $178,000 - $2,000 - $5,000 + $6,000 = $177,000.

The best choice would be C.

Irwin Company Counted Its Ending Inventory as $178,000 at Year-End