Kari Downs, an auditor with Wheeler CPAs, is peiforming a review of Vaughn Company's inventory account Vaughn did not have a gobd year, and top management is under oressure to boost reported income. According to its records, the inventory balance at vear: end was $735,000. However, the following information was not considered when determining that amount. (a) Prepare a schedule to determine the correct imentory amount. af on amount reduces the account balance then enter with a negotive sim preceding the number, es - 15,000 , or porenthests es (15,000). Enter 0 ir there is no effect) Ending inventory-as reported 1. Included in the company's count were goods with a cost of $249,000 that the company is holding on consignnent. The goods belong to Kroeger Corporation. 2. The phrsical count did not include goods purchased by Vaughn with a cost of $34,000 that were shipped FoB destination on December 28 and did not arrive at Vaughn warehouse until January 3. 3. Induded in the imventory account was 520,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming ycar. 4. The conpary recelwed an order on December 29 that was boved and sitting on the losding dock swaiting pick up an December 31 The shipper picked up the goods on January 1 and delivered them on January 6 . The sthipping terms were fos shipping point. The goods had a selling price of $31,000 and a cost of $19,000. The goods were not. included in the count because they were sitting an the dock. 5. On December 29 , Vaugtun shipped gocds with a selling price of $82,000 and a cost of \$65,000 to Macchia 5ales Corporation FCB shipping point. The goods arrived on Jamuary 3. Micchis had only ordered goods with a selling price of 515,000 and acost of $8,000, However, a sales manager at Vaugtin had authorized the shipenent and uid that if Machia wanted to ship the geods backnoct week. it could. 6. Induded in the count was $50,000 of goods that were parts for a nuchine that the company no longer made. Given the high tech nature of Vaugtus products, it was anlikeiy that these obsolete parts had any other use. Howeves, nanagensent would prefer to keep them on the books at cost, "since that is what we pald for thein after all