Jensen Tire had two large shipments in transit at December 31. One was a $125,000 inbound shipment

Question:

Jensen Tire had two large shipments in transit at December 31. One was a $125,000 inbound shipment of merchandise (shipped December 28, F.O.B. shipping point), which arrived at Jensen’s receiving dock on January 2. The other shipment was a $95,000 outbound shipment of merchandise to a customer, which was shipped and billed by Jensen on December 30 (terms F.O.B. ship-ping point) and reached the customer on January 3.
In taking a physical inventory on December 31, Jensen counted all goods on hand and priced the inventory on the basis of average cost. The total amount was $600,000. No goods in transit were included in this figure.
What amount should appear as inventory on the company’s at December 31?
Explain. If you indicate an amount other than $600,000, state which asset or liability other than inventory also would be changed in amount.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...