Herc Co.’s inventory at December 31, 2011, was

$1,500,000 based on a physical count priced at cost, and before any necessary adjustment for the following:

• Merchandise costing $90,000, shipped FOB shipping point from a vendor on December 30, 2011, was received and recorded on January 5, 2012.

• Goods in the shipping area were excluded from inventory although shipment was not made until January 4, 2012. The goods, billed to the customer FOB shipping point on December 30, 2011, had a cost of

$120,000.

What amount should Herc report as inventory in its December 31, 2011 balance sheet?

a. $1,500,000

b. $1,590,000

c. $1,620,000

d. $1,710,000