Valuation of Inventory The inventory on hand at the end of 2019 for Reddall Company is valued at a cost of $94,550. The following items were not included in this inventory:
Required:
Determine the cost of the ending inventory that Reddall should report on its December 31, 2019, balance sheet, assuming that its selling price is 140% of the cost of the inventory.
Compute the cost of the ending inventory to be shown in the balance sheet of Company R.
Cost of goods sold:
Cost of goods sold is the total of all the expenses incurred by a company to sell the goods during the given period.
Compute the ending inventory of Company R for the year end:
Particulars | Amount ($) | Amount ($) |
Ending inventory before adjustments | Â | $ 94,550 |
Add: | Â | Â |
Goods in transit (FOB shipping) | $ 4,100 | Â |
Freight costs | $ 220 | Â |
Goods out on consignment (1) | $ 3,250 | Â |
Good sold to Company G, FOB destination (2) | $ 1,230 | Â |
Total cost | Â | $ 8,800 |
Closing balance | Â | $ 103,350 |
Table (1)
The ending inventory at the year-end for Company R is $103,350.
Working note (1):
Compute the goods out on consignment...
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