Werth Company asks you to review its December 31, 2010 inventory
values and prepare the necessary adjustments to the books. The following
information is given to you.
•Werth uses the periodic method of recording inventory. A physical
count reveals $234,890 of inventory on hand at December 31, 2010.
•Not included in inventory is $8,540 of merchandise purchased from
Minsky Industries. This merchandise was received on December 31 after
the inventory had been counted. The invoice was received and recorded on
•Included in inventory was $10,438 of inventory held by Werth on consignment from Jackel Industries.
•Included in inventory is merchandise sold to Sims f.o.b. shipping
point. This merchandise was shipped after it was counted. The invoice
was prepared and recoded as a sale for $18,900 on December 31, The cost
of this merchandise was $11,520, and Sims received the merchandise on
•Excluded from inventory was a carton labeled “Please accept for
credit.” This carton contains merchandise costing $1,500, which had been
sold to a customer for $2,600. No entry had been made to the books to
reflect the return, but none of the returned merchandise seemed damaged.
Determine the proper inventory balance for Werth Company at December 31, 2010.