The Constance Corporation’s inventory at December 31, 2021, was $127,500 (at cost) based on a physical count of inventory on hand, before any necessary adjustment for the following: Merchandise costing $17,500, shipped f.o.b. shipping point from a vendor on December 27, 2021, was received by Constance on January 5, 2022. Merchandise costing $47,500 was shipped to a customer f.o.b. shipping point on December 28, 2021, arrived at the customer’s location on January 6, 2022. Merchandise costing $23,500 was being held on hand for Jess Company on consignment. Estimated sales returns are 20% of annual sales. Sales revenue was $555,000 with a gross profit ratio of 30%.
What amount should Constance Corporation report as inventory in its December 31, 2021, balance sheet?
Multiple Choice
a. $160,250
b. $145,250
c. $187,250
d. $190,250
