Determining Merchandise to Be Included or Excluded from Ending Inventory The unadjusted inventory balance of Ultim Corp. is $260,000 on December 31 based on a physical inventory count. The following items must be considered before the inventory valuation is finalized.

a. On December 31, the physical inventory excluded $650 of merchandise inventory set aside for expected shipment to a customer.

b. On December 31, the physical inventory excluded $2,600 of merchandise inventory out on consignment in a customers showroom.

c. On December 31, the physical inventory excluded $2,080 of merchandise held on consignment.

d. In-transit merchandise of $1,950 was shipped f.o.b. destination to a customer and was excluded from the physical inventory count. The merchandise was turned over to a common carrier on December 28 and is delivered to the customer on December 31.

e. Ultim Corp. ordered $2,080 of merchandise on December 26. The merchandise was shipped to Ultim Corp. f.o.b. shipping point on December 30 and was expected to arrive January 2 of next year. The merchandise was not included in the physical inventory count.

f. A return to a vendor of merchandise for $2,600 was in transit on December 31 and was excluded from the physical inventory count. The merchandise was shipped f.o.b. shipping point on December 30.

Required: Review items a through f and determine the adjusted inventory balance for year-end December 31.