Gold Company asks you to review its December 31, 2020, inventory values and prepare the necessary adjustments to the books. The following information is given to you.

1. Gold uses the periodic method of recording inventory. A physical count reveals $234,890 of inventory on hand at December 31, 2020.

2. Not included in the physical count of inventory is $13,420 of merchandise purchased on December 15 from ABC Company. This merchandise was shipped f.o.b. shipping point on December 29 and arrived in January. The invoice arrived and was recorded on December 31.

3. Included in inventory is merchandise sold to DEF Company on December 30, f.o.b. destination. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale on account for $12,800 on December 31. The merchandise cost $7,350, and DEF received it on January 3.

4. Included in inventory was merchandise received from GHI Company on December 31 with an invoice price of $15,630. The merchandise was shipped f.o.b. destination. The invoice, which has not yet arrived, has not been recorded.

5. Not included in inventory is $8,540 of merchandise purchased from JKL Company. This merchandise was received on December 31 after the inventory had been counted. The invoice was received and recorded on December 30.

6. Included in inventory was $10,438 of inventory held by Gold on consignment from MNO Company.

7. Included in inventory is merchandise sold to TUV Company f.o.b. shipping point. This merchandise was shipped on December 31 after it was counted. The invoice was prepared and recorded as a sale for $18,900 on December 31. The cost of this merchandise was $10,520, and TUV received the merchandise on January 5.

Instructions:

1. a. Determine the proper inventory balance for Gold Company at December 31, 2020.