Problem 3:

The December 31, 2016, year-end inventory balance of the Delphi Printing Company is $470,000. You have been asked to review the following transactions to determine if they have been correctly recorded.

1. Materials purchased from a supplier and shipped to Delphi f.o.b. destination on December 28, 2016, were received on January 2, 2017. The invoice cost of $40,000 is not included in the preliminary inventory balance.

2. At year-end, Delphi had $9,000 of merchandise on consignment from the Harvey Company. This merchandise is included in the preliminary inventory balance.

3. On December 29, merchandise costing $15,000 was shipped to a customer f.o.b. shipping point and arrived at the customers location on January 3, 2017. The merchandise is not included in the preliminary inventory balance.

4. Materials purchased from a supplier and shipped to Delphi f.o.b. shipping point on December 28, 2016 were received on January 4, 2017. The invoice cost of $22,000 is not included in the preliminary inventory balance.

Determine the correct inventory amount to be reported on Delphi's 2016 balance sheet.