Conway Inc had the following inventory items on 1231xx Goods

Conway Inc. had the following inventory items on 12/31/xx Goods for sale in the store of another retailer on consignment from Conway Inc. that had a cost of $3,400. Goods in the store of Conway Inc. placed on consignment from another company with a cost of $2,800. Goods owned by Conway Inc. that cost $3,400 have been damaged by water. The goods can be sold for $3,800 if $2,400 is spent cleaning and repairing them. How much of the above items should be included in the companys inventory on the December 31 Balance Sheet? $6200

Solution

Solution: The amount of inventory, that Conway Inc. should indicate on its dec.31 balance sheet, can be computed as follows;

Goods on consignment for resale on the store of another retailer $3,400

NRV of damaged goods in hands ($3,800-2,400)    1,400

Thus, inventory as on dec. 31 balance sheet of Conway Inc.    $4,800