Determine the correct inventory amount.

E$6\mathrm{.}2($LO $1),$ AN Farley Bains, an auditor with Nolls CPAs, is performing a review of Ryder Company$$s Inventory account. Ryder did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year$-$end was $$740,000.$ However, the following information was not considered when determining that amount.

Included in the company$$s count were goods with a cost of $$228,000$ that the company is holding on consignment. The goods belong to Nader Corporation.

The physical count did not include goods purchased by Ryder with a cost of $$40,000$ that were shipped FOB shipping point on December $28$ and did not arrive at Ryder$$s warehouse until January $3.$

Included in the Inventory account was $$17,000$ of office supplies that were stored in the warehouse and were to be used by the company$$s supervisors and managers during the coming year.

The company received an order on December $29$ that was boxed and was sitting on the loading dock awaiting pick$-$up on December $31.$ The shipper picked up the goods on January $1$ and delivered them on January $6.$ The shipping terms were FOB shipping point. The goods had a selling price of $$40,000$ and a cost of $$29,000.$ The goods were not included in the count because they were sitting on the dock.

Included in the count was $$50,000$ of goods that were parts for a machine that the company no longer made. Given the high$-$tech nature of Ryder$$s products, it was unlikely that these obsolete parts had any other use. However, management would prefer to keep them on the books at cost$,$since that is what we paid for them, after all.$$

Instructions

Prepare a schedule to determine the correct inventory amount. Provide explanations for each item above, stating why you did or did not make an adjustment for each item.