Premier Bank and Trust is considering giving Lima Company aloan. Before doing so, they decide that further discussions withLima’s accountant may be desirable. One area of particular concernis the inventory account, which has a year-end balance of $297,000.Discussions with the accountant reveal the following.
Instructions
Determine the correct inventory amount on December 31. (If answeris zero, please enter 0. Do not leave any fields blank. If amountis a decrease, use either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).)
Ending inventory $
1. Lima sold goods costing $38,000 to Comerica Company, FOBshipping point, on December 28. The goods are not expected toarrive at Comerica until January 12. The goods were not included inthe physical inventory because they were not in the warehouse.
2. The physical count of the inventory did not include goodscosting $95,000 that were shipped to Lima FOB destination onDecember 27 and were still in transit at year-end.
3. Lima received goods costing $22,000 on January 2. The goods wereshipped FOB shipping point on December 26 by Galant Co. The goodswere not included in the physical count.
4. Lima sold goods costing $35,000 to Emerick Co., FOB destination,on December 30. The goods were received at Emerick on January 8.They were not included in Lima’s physicalinventory.
5. Lima received goods costing $44,000 on January 2 that wereshipped FOB destination on December 29. The shipment was a rushorder that was supposed to arrive December 31. This purchase wasincluded in the ending inventory of $297,000.
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