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8‐6
December 31, 2013 inventory balance ‐ $165,000 (based on 12/31/13
physical count) before considering additional information
1) Goods of $30,000 shipped to Kwok F.O.B. destination that were
received on January 4, 2014 should be excluded from 2013 inventory.
2) Goods of $17,000 shipped to Kwok F.O.B. shipping point on December
Goods of $17,000 shipped to Kwok F.O.B. shipping point on December
27, 2013 should be included in the 2013 inventory. The date the
inventory was received by Kwok is irrelevant.
3) Goods of $22,000 shipped from Kwok to a customer F.O.B. destination
on December 27, 2013 and received by customer on January 3, 2014
should be included in the 2013 inventory.
4) Goods of $13,000 shipped from Kwok to a customer F.O.B. destination
, y
on December 26, 2013 and received by customer on December 30, ,
2013 should be excluded from the 2013 inventory.
5) Goods of $12,000 shipped from Kwok to a customer F.O.B. shipping
point on December 28, 2013 should be excluded from the 2013
inventory. The date received by the customer is irrelevant.
©Dr. Chula King
All Rights Reserved
Exercise 8‐6 (continued)
Determine the correct inventory amount that should be reported on
the 2013 balance sheet.
Inventory balance before additional transactions $165,000
Add:
(2) Goods shipped F.O.B. shipping point, 12/28 17,000
(3) Goods shipped F.O.B. destination, 12/27 22,000
Correct inventory balance $204,000
©Dr. Chula King
All Rights Reserved