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Windsor, Inc. took a physical inventory on December 31 and determined that goods costing $222,500 were on hand. Not included in the physical count were $31,000 of goods purchased from Bonita Industries, FOB, shipping point, and $25,500 of goods sold to Metlock, Inc. for $33,000, FOB destination. Both the Bonita purchase and the Metlock sale were in transit at year-end. What amount should Windsor report as its December 31 inventory?

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akiran007

Answer:

December 31 Ending Inventory   $ 255500

Explanation:

Windsor, Inc.

December 31 Physical inventory on hand $222,500

Add goods sold to Metlock, Inc. for $33,000

December 31 Ending Inventory   $ 255500

Purchases in transit are not included in the inventory unless received.

Sales in transit are included in the inventory .

The goods sold are the seller's inventory unless received by the purchaser.Similarly purchases in transit are not included in the inventory evaluation.

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