Determine the correct Inventory Balance
Seemore Lens Company(SLC) sells contact lenses FOB destination. For the year ended December 31, the company reported Inventory of $70,000 and Cost of goods sold of $420,000.
A. Included in Inventory (and Accounts Payable) are $10,000 of lenses held on consignment.
B. Included in the Inventory Balance are $5,000 of office supplies held in SLC's warehouse.
C. Excluded from the inventory balance are $8,000 of lenses in the warehouse, ready to send to customers on January 1. SLC reported these lenses as sold on December 31, at a price of $15,000.
D. Included in the Inventory balance are $3,000 of lenses that were damaged in December and will be scrapped in January, with no recoverable value.
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Inventory
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Cost of Goods Sold
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|
Present Balance
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70000
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420000
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a. Less Inventory held on consignment
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-10000
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+10000
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b. Less supplies in inventory
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-5000
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+5000
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c. Add goods sold but not dispatched
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+8000
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-8000
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d. Less : goods damaged
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-3000
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+3000
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Appropriate Balance
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52000
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412000
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