(I don't know how to represent this in Excel)

Jensen Tire had two large shipments in transit at December 31. One was a $130,000 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. shipping

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 inventory amount was $600,000. No goods in

transit were included in this figure.

What amount should appear as inventory on the company's balance sheet 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, assuming that all inventory purchases are made on

credit.