A physical inventory count of MegaCorp has a $50,000 balance before considering the following:

Consigned goods sent to and held by Madison Company: $10,000

Inventory in transit sold FOB destination: $7,500

Inventory in transit purchased FOB destination: $2,500

At what amount should inventory be reported on the balance sheet?

The amount of inventory reported on balance sheet is $62,500

Explanation:

In this question, we are asked to calculate the value at which inventory will be reported on the balance sheet.

To do this, we can employ a mathematical approach.

Mathematically;

Amount of inventory reported in Balance sheet = physical inventory + goods sent on consigned + inventory purchased on fob destination

From the question, we can identify the following;

Physical inventory = $50,000

Goods sent on consigned = $10,000

Inventory purchased on fob destination = $2,500

The amount of inventory reported in balance sheet = 50,000 + 10,000 + 2,500 = $62,500