Question 3

Case 1: Otter Co. is valuing its inventory at year-end. The company has on hand $22,000 in inventory in its warehouse. The company purchased $4,500 of inventory, which was shipped on December 29 with FOB shipping terms. The company didnt receive the items until after year-end. The company also shipped $6,900 of merchandise inventory to customers on December 27 with FOB shipping terms. The customers all received the items after year-end. What should the company record as inventory at year-end? Case 2: Otter Co. has $16,700 of merchandise inventory in its warehouse as of the year-end. Included in this amount is $1,400 of cosigned inventory, for which Otter Co. acts as a consignee. Otter Co. did not include $2,400 of inventory that was shipped on December 29 to customers FOB destination. The customers received the items after year-end. What should the company record as inventory on its balance sheet? Case 3: Otter Co. acts as a consigner for $5,000 of merchandise inventory at retail locations. The company has $8,900 of inventory in its warehouse. The company also has a purchase with shipping terms FOB destination in transit as of year-end that includes $1,500 of merchandise. The company has sales of $1,100 of merchandise in transit at year-end that was shipped FOB destination. What should the company record as inventory on its balance sheet?