Question :

Columbia Bank and Trust is considering providing Gallup Company a loan. Before doing so, it decided that further discussions with Gallup's accountant can be desirable. One area of exacting concern is the Inventory account, which has a year-end balance of $275,000. Discussions with the accountant reveal the following.

1. Gallup sold goods costing $55,000 to Bazil Company FOB shipping point on 28^th December. The goods are not expected to reach Brazil until 12^th January. The goods were not added in the physical inventory due to they were not in the warehouse.

2. The physical count of inventory did not add goods costing $95,000 that were shipped to Gallup FOB destination on 27^th December and were still in transit at year-end.

3. Gallup received goods costing $25,000 on January 2. The goods were not added in the physical count.

4. Gallup sold goods costing $51,000 to Lamey of Canada FOB destination on 30^th December. The goods were received in Canada on January 8. They were not added in Gallups physical inventory.

5.Gallup gets goods costing $42,000 on Jan 2 that were shipped FOB destination on Dec 29. The shipment was a rush order that was supposed to arrive Dec 31. This purchase was included in the ending inventory of $275,000.

Evaluate the correct inventory amount on Dec. 31.