Penman Designs Inc. is trying to determine the value of its ending inventory at February 28, 2020, the companys yearend. The accountant counted everything that was in the warehouse as of February 28, which resulted in an ending inventory valuation of $48,000. However, she did not know how to treat the following transactions so she did not record them.

(a) On February 26, Penman shipped to a customer goods costing $800. The invoice price was $1,350. The goods were shipped FOB destination, and the receiving report indicates that the customer received the goods on March 2.

(b) On February 26, Nissim Inc. shipped goods to Penman FOB shipping point. The invoice price was $350. The receiving report indicates that the goods were received by Penman on March 2.

(c) Penman had damaged goods set aside in the warehouse because they are no longer saleable. These goods cost $400 and Penman originally expected to sell these items for $600.

(d) Penman had $300 of inventory on consignment at Uris Company.

(e) On February 26, Penman ordered goods costing $780. The goods were shipped FOB destination on February 27. Penman received the goods on March 1.

(f) On February 28, Penman packaged goods and had them ready for shipping to a customer FOB destination. The invoice price was $350; the cost of the items was $220. The receiving report indicates that the goods were received by the customer on March 2.

Required: For each item above, determine whether the item should be (1) added to Penmans inventory, (2) subtracted from Penmans inventory, or (3) have no effect on Penmans inventory. Show your adjustments by writing the amount to be adjusted in (1), (2), or (3) below. If there is no effect on Penmans inventory, write 0 (zero) in the column of (3) No effect.

Item (1) Add to inventory (2) Subtract from inventory (3) No effect (a) (b) (c) (d) (e) (f)