Question

Bedrock Company reported a December 31 ending inventory balance of $413,500. The following additional information is also available:______.
The ending inventory balance of $413,000 included $72,200 of consigned inventory for which Bedrock was the consignor.
The ending inventory balance of $413,000 included $22,400 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.
Based on this information, the correct balance for ending inventory on December 31 is:_________.

Answer 1

Answer:

The correct balance for ending inventory on December 31 is $390,600.

Explanation:

To determine the correct balance for ending inventory on December 31, the following have to be noted:

1. Consigned inventory for which Bedrock was the consignor.

This is still part of the inventory Bedrock. Since this has already been correctly includes in the ending inventory balance of $413,000, no adjustment is required.

2. Office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.

Office supplies held for use are not part of the inventory. Since this has been incorrectly included in the ending inventory balance of $413,000, it has to be deducted.

Based on the two points above, we have.

Correct balance for ending inventory = Ending inventory balance - Supplies = $413,000 - $22,400 = $390,600.

Therefore, the correct balance for ending inventory on December 31 is $390,600.