Cheyenne Corp. took a physical inventory on December 31 and determined that goods costing $200,000 were on hand. Not included in the physical count were $26,400 of goods purchased from Pelzer Corporation, FOB shipping point, and $21,400 of goods sold to Alvarez Company for $28,200, FOB destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Stallman report as its December 31 inventory?

$247,800‬

Explanation:

Inventory December 31

physical inventory on December 31                           $200,000

Add: Goods purchased FOB shipping point                $26,400

Add: Goods sold FOB Destination                               $21,400

                                                                                      $247,800‬

FOB Shipping Point - the purchaser gains title to the inventory at the shipping point, so when Pelzer shipped the goods, they belonged to Stallman.

FOB destination - means the seller maintains title until the merchandise reaches its destination, so since the goods have not reached their destination, the goods still belonged to Stallman

say it in english maybe we can