Multiple-choice. At the end of December, Lonnie Company's inventory of goods physically on hand totaled $540,000. In addition, Lonnie had two shipments of merchandise in transit on December 31 as follows:

• A $20,000 outbound shipment of goods sold by Lonnie on terms FOB shipping point.
• A $35,000 inbound shipment of goods purchased by Lonnie on terms FOB destination.

Based on these facts, what amount should appear as inventory on Lonnie Company's December 31 balance sheet?

A. $575,000

B. $540,000

C. $595, 000

D. $560,000

(6) In November 2019, Dorsey Company transferred inventory to Gladney Company and agreed to repurchase the merchandise early in 2020. Gladney then used the inventory as collateral to borrow money from the bank, remitting the proceeds to Dorsey. In 2020 when Dorsey repurchased the inventory, Gladney used the proceeds to repay the bank loan. Should this be considered a sale by Dorsey in 2019 or should the inventory remain on Dorsey Company's books?