Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a commission of 25% of the selling price on any merchandise sold. During the year, Mogul ships inventory with a cost of $87,000 to Ski Outfit and pays shipping costs of $12,900. By the end of the year, $67,000 of the merchandise has been sold to customers for a total of $92,000. Mogul allocates $9,500 of the shipping costs to inventory sold and the other $3,400 to inventory not sold. Mogul also paid advertising costs during the year of $13,500. What amount of inventory will Mogul report at year end?

Multiple Choice

• $20,000.

• $23,400.

• $43,400.

• $56,900.