Question :
Columbia Bank and Trust is considering providing Gallup Company a loan. Before doing so, it decided that further discussions with Gallup's accountant can be desirable. One area of exacting concern is the Inventory account, which has a year-end balance of $275,000. Discussions with the accountant reveal the following.
1. Gallup sold goods costing $55,000 to Bazil Company FOB shipping point on 28th December. The goods are not expected to reach Brazil until 12th January. The goods were not added in the physical inventory due to they were not in the warehouse.
2. The physical count of inventory did not add goods costing $95,000 that were shipped to Gallup FOB destination on 27th December and were still in transit at year-end.
3. Gallup received goods costing $25,000 on January 2. The goods were not added in the physical count.
4. Gallup sold goods costing $51,000 to Lamey of Canada FOB destination on 30th December. The goods were received in Canada on January 8. They were not added in Gallups physical inventory.
5.Gallup gets goods costing $42,000 on Jan 2 that were shipped FOB destination on Dec 29. The shipment was a rush order that was supposed to arrive Dec 31. This purchase was included in the ending inventory of $275,000.
Evaluate the correct inventory amount on Dec. 31.