Revolution Hardware Reported $475,000 of Inventory on December 31, 2016

question 102

Short Answer

Revolution Hardware reported $475,000 of inventory on December 31, 2016, based on a physical count.
Additional information is as follows:
Included in the 2016 physical count were machines billed to a customer FOB shipping point
? on December 31. These machines had a cost of $12,000 and had been billed at $30,000. The shipment was on Revolution's loading dock waiting to be picked up by the carrier.
? Goods were in transit from a vendor to Revolution. The invoice cost was $85,000 and the goods were shipped FOB shipping point on December 29, 2016.
? Work in process inventory not included in the physical count) costing $7,850 was sent to an outside processor for finishing on December 30, 2016.
? Goods out on consignment amounted to $26,500 sales price) with shipping costs of $590 not included in sales price). Markup is 15% on cost.
Required:
Compute the correct amount of December 31, 2016, ending inventory for Revolution Hardware.

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Definitions:

Safety Inspections

The examination of facilities, equipment, or processes to ensure they comply with safety standards and regulations, aiming to prevent accidents and injuries.

Health Inspectors

Officials responsible for ensuring compliance with public health regulations and standards, especially in food establishments, housing, and workplaces.

Closed Shop

A labor arrangement whereby all employees must be members of a specific union before being hired, typically agreed upon through union and employer negotiations.

Taft-Hartley Act

A United States federal law that restricts the activities and power of labor unions.