Bell inc. took a physical inventory at the end of the year and determined that $780,000 of goods were on hand. in addition, bell, inc. determined that $60,000 of goods that were in transit that were shipped f.o.b. shipping point were actually received two days after the inventory count and that the company had $90,000 of goods out on consignment. what amount should bell report as inventory at the end of the year?
Their complete inventory involves all three "locations" of goods: those in their warehouse, those in transit (i.e. those that simply had not arrived in time for the inventory) and those on consignment -- loaned to others, whose value still belongs to Bell Inc. Simple addition of these three together yields $980,000 worth of total goods in their possession.
