The Inventory Account of Lance Company at December 31, 2007

Multiple Choice

The inventory account of Lance Company at December 31, 2007, included the following items: $\begin{array} { l } &\text { Inventory Amount}\\ \text { Merchandise out on consignment at sales price}&\\ \text {(including markup of \( 40 \% \) on selling price) }&\$15,000\\ \text {Goods purchased, in transit (shipped f.o.b. shipping point) }&12,000\\ \text { Goods held on consignment by Lance}&13,000\\ \text {Goods out on approval (sales price \( \$ 7,600 \) , cost \( \$ 6,400 \) ) }&7,600\\\end{array}$
Based on the above information, the inventory account at December 31, 2007, should be reduced by

A) $20,200.
B) $22,600.
C) $32,200.
D) $32,000.