1. First Bank and Trust are considering giving Markhan Company a loan. Before doing so, they decide that further discussions with Markhan's accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of $255,000. Discussions with the accountant reveal the following. 
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3. 1. Markhan received goods costing $22,000 on January 2. The goods were shipped FOB shipping point on December 26 by Cook Co. The goods were not included in the physi- cal count. 
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5. 2. The physical count of the inventory did not include goods costing $79,000 that were shipped to Markhan FOB destination on December 27 and were still in transit at year-end. 
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7. 3. Markhan sold goods costing $47,000 to Lane Company, FOB shipping point, on Decem- ber 28. The goods are not expected to arrive at Lane until January 12. The goods were not included in the physical inventory because they were not in the warehouse. 
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9. 4. Markhan sold goods costing $42,000 to Toby Co., FOB destination, on December 30. The goods were received at Toby on January 8. They were not included in Markhan's physical inventory 
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11. 5. Markhan received goods costing $41,000 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive on December 31. This purchase was included in the ending inventory of $255,000. 
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13. Instructions Determine the correct inventory amount on December 31.