Valuation of Inventory
Response to the following problem:
The inventory on hand at the end of 2010 for the Reddall Company is valued at a cost of $87,450.
The following items were not included in this inventory:
1. Purchased goods in transit, under terms FOB shipping point, invoice price $3,700, freight costs $170.
2. Goods out on consignment to Marlman Company, sales price $2,800, shipping costs of $210.
3. Goods sold to Grina Co. under terms FOB destination, invoiced for $1,700, which included $251 freight charges to deliver the goods. Goods are in transit.
4. Goods held on consignment by the Reddall Company at a sales price of $2,700, which included sales commission of 20% of sales price.
5. Purchased goods in transit, shipped FOB destination, invoice price $2,100 which included freight charges of $190.
Required:
Determine the cost of the ending inventory that Reddall should report on its December 31, 2010 balance sheet, assuming that its selling price is 140% of the cost of the inventory.