Given the Following Items and Costs as of the Balance

Multiple Choice

Given the following items and costs as of the balance sheet date,determine the value of Faltron Company's merchandise inventory.
$1,000 goods sold by Faltron to another company.The goods are in transit and shipping terms are FOB destination.
$2,000 goods sold by another company to Faltron.The goods are in transit and shipping terms are FOB destination.
$3,000 owned by Faltron but in the possession of another company the consignee.
Damaged goods owned by Faltron which originally cost $4,000,but which now have a $500 net realizable value.

A) $10,000
B) $6,500
C) $5,500
D) $5,000
E) $4,500