Tri-State Bank and Trust is considering giving Josef Company a loan. Before doing so, management decides that further discussions
Tri-State Bank and Trust is considering granting a loan to Josef Company. Before proceeding, the management believes it would be prudent to engage in further discussions with Josef's accountant regarding specific concerns related to the company's inventory account, which has a year-end balance of $297,000.
After discussing with the accountant, the following points were revealed:
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Josef sold goods costing $38,900 to Sorci Company, shipping them FOB (Free On Board) shipping point on December 28. Although these goods are not expected to arrive at Sorci until January 12, they were excluded from the physical inventory count as they were not present in the warehouse.
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The physical count of the inventory did not account for goods costing $93,500 that were shipped to Josef FOB destination on December 27 and were still in transit as of year-end.
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On January 2, Josef received goods valued at $27,600 that had been shipped FOB shipping point on December 26 by Solita Co. These goods were also not included in the physical inventory count.
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Josef sold goods costing $47,000 to Natali Co., with shipment terms of FOB destination, on December 30. These goods were received by Natali on January 8 and were not factored into Josef's physical inventory.
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Josef received goods costing $43,100 on January 2, which were shipped FOB destination on December 29. This shipment was particularly urgent and was expected to arrive by December 31; it was included in the ending inventory figure of $348,500.
Given these details, what is the correct amount of inventory on hand for Josef Company as of December 31?
4 Answers
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