Questions: Exercise 8-7 (Algo) Goods in transit; consignment [LO8-2] The December 31, 2024, year-end inventory balance of the Almond Corporation is 244,000. You have been asked to review the following transactions to determine if they have been correctly recorded. 1. Goods shipped to Almond f.o.b. destination on December 26, 2024, were received on January 2, 2025. The invoice cost of 47,000 is included in the preliminary inventory balance. 2. At year-end, Almond held 31,000 of inventory on consignment from the Hardgrove Company. This inventory is included in the preliminary inventory balance. 3. On December 29, inventory costing 7,700 was shipped to a customer f.o.b. shipping point and arrived at the customer's location on January 3,2025. The inventory is not included in the preliminary inventory balance. 4. At year-end, Almond had inventory costing 32,000 on consignment with the Juniper Corporation. The inventory is not included in the preliminary inventory balance. Required: Determine the correct inventory amount to be reported in Almond's 2024 balance sheet.

To determine the correct inventory amount to be reported in Almond's 2024 balance sheet, we need to analyze each transaction and adjust the preliminary inventory balance accordingly.

1. Goods shipped to Almond f.o.b. destination on December 26, 2024, received on January 2, 2025:

   • Since the goods were shipped f.o.b. destination, they should not be included in Almond's inventory until they are received. Therefore, the $47,000 should be excluded from the inventory balance.

2. Inventory on consignment from the Hardgrove Company:

   • Consigned goods are not owned by Almond and should not be included in the inventory. Therefore, the $31,000 should be excluded from the inventory balance.

3. Inventory shipped to a customer f.o.b. shipping point on December 29, 2024:

   • Since the goods were shipped f.o.b. shipping point, ownership transfers to the customer when the goods are shipped. Therefore, the $7,700 should not be included in Almond's inventory, which is correctly reflected as it is not included in the preliminary balance.

4. Inventory on consignment with the Juniper Corporation:

   • Inventory that Almond has consigned to others is still owned by Almond and should be included in the inventory. Therefore, the $32,000 should be added to the inventory balance.

Now, let's calculate the correct inventory balance:

• Preliminary inventory balance: $244,000
• Subtract goods shipped f.o.b. destination: -$47,000
• Subtract consigned inventory from Hardgrove: -$31,000
• Add consigned inventory with Juniper: +$32,000

Correct inventory balance = $244,000 - $47,000 - $31,000 + $32,000 = $198,000

Therefore, the correct inventory amount to be reported in Almond's 2024 balance sheet is $198,000.