Question - Information relating to the Middle Ground Company's inventory as of December 31, 2011 includes:
1. Middle Ground uses the periodic inventory method.
2. On December 31, a physical count of inventory indicates that $453,500 of inventory was on hand.
3. Middle Ground shipped $25,000 of merchandise to the ABC Company on December 28, FOB shipping point. ABC actually received the shipment on January 4.
4. Middle Ground ordered $45,000 of merchandise from the XYZ Company on December 29, FOB destination. XYZ shipped the merchandise on December 31 and Middle Ground received the shipment on January 2.
5. Middle Ground ordered $22,000 of merchandise from the PDQ Company on December 31, FOB shipping point. PDQ shipped the merchandise on January 2 and Middle Ground received the shipping on January 5.
6. Middle Ground shipped $34,000 of merchandise to the RST Company on December 27, FOB destination. RST received the shipment on January 3.
7. Middle Ground ordered $12,000 of merchandise from the DEF Company on December 31, FOB shipping point. DEF shipped the merchandise on the same day and Middle ground received the shipment on January 2.
8. Middle Ground's inventory count included $6,000 in merchandise it received from the KLM Company with the agreement that Middle Ground would try to sell it, keep 20% of the sales price, and remit the remainder the KLM. If it did not sell, it would be returned to KLM.
9. Middle Ground shipped $75,000 of merchandise on December 15 to the GHI Company. Prior to the shipment, Middle Ground agreed to repurchase the inventory on January 15 for $75,000 plus 6% and to pay all costs of shipping both ways.
Instructions:
1) Prepare a schedule in good form computing the correct ending inventory value for Middle Ground.