Company A has consignment arrangements with Supplier B and with Customer C. In particular, Supplier B ships some of its goods to Company A on consignment, and Company A ships some of its goods to Customer C on consignment. At the end of 2012, Company A’s accounting records showed:
Goods on consignment from Supplier B . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,000
Goods on consignment with Customer C. . . . . . . . . . . . . . . . . . . . . . . . . 10,000
1. If a physical count of inventory reveals that $30,000 of goods are on hand, what amount of ending inventory should be reported?
2. If the amount of the beginning inventory for the year was $27,000 and purchases during the year were $59,000, then what is the cost of goods sold for the year? [Assume the ending inventory from part (1).]
3. If, instead of these facts, Company A had only $4,000 of goods on consignment with
Customer C, but had $10,000 of consigned goods from Supplier B, and physical goods on hand totaled $36,000, what would the correct amount of the ending inventory be?
4. With respect to part (3), if beginning inventory totaled $24,000 and the cost of goods sold was $47,500, what were the purchases?