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For Each of the Following,calculate the Cost of Inventory Reported $73,000\$ 73,000

Question 72

Essay

For each of the following,calculate the cost of inventory reported on the balance sheet.
(a) The total merchandise inventory counted at the end of the year was $73,000\$ 73,000 . Purchases for $5,000\$ 5,000 are in transit under FOB\mathrm { FOB } shipping point terms.

(b) The total merchandise inventory counted at the end of the year was $75,000\$ 75,000 . Purchases for $5,000\$ 5,000 are in transit under FOB\mathrm { FOB } destination point terms.

Correct Answer:

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(a)$78,000 = $73,000 + $5,000
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