Oriole Company took a physical inventory on December 31 and determined that goods costing $198,500 were on hand. Not included in the physical count were $26,000 of goods purchased from Kingbird, Inc., FOB, shipping point, and $20,500 of goods sold to Blue Spruce Corp. for $31,000, FOB destination. Both the Kingbird purchase and the Blue Spruce sale were in transit at year-end. What amount should Oriole report as its December 31 inventory?