Larkspur, Inc. took a physical inventory on December 31 and determined that goods costing $235,000 were on hand. Not included in the physical count were $25,800 of goods purchased from Pelzer Corporation, FOB shipping point, and $22,000 of goods sold to Alvarez Company for $28,600, FOB destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Larkspur report as its December 31 inventory?