Problem:
Conoco Company took a physical inventory on December 31 and determined that goods costing $200,000 were on hand. Not included in the physical count were $25,000 of goods purchased from Ajax Corporation, f.o.b. shipping point, and $22,000 of goods sold to Boise Company for $30,000, f.o.b. destination. Both the Ajax purchase and the Boise sale were in transit at year-end. What amount should Conoco report as its December 31 inventory?