Rachel Warren, an auditor with Laplante CPAs, is performing a review of Schuda Companys inventory account. Schuda did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $811,000.

However, the following information was not considered when determining that amount. Ending inventory-as reported $

1. Included in the companys count were goods with a cost of $300,000 that the company is holding on consignment. The goods belong to Harmon Corporation.

2. The physical count did not include goods purchased by Schuda with a cost of $30,000 that were shipped FOB destination on December 28 and did not arrive at Schuda's warehouse until January 3.

3. Included in the inventory account was $18,600 of office supplies that were stored in the warehouse and were to be used by the companys supervisors and managers during the coming year.

4. The company received an order on December 29 that was boxed and sitting on the loading dock awaiting pick-up on December 31. The shipper picked up the goods on January 1 and delivered them on January 6. The shipping terms were FOB shipping point. The goods had a selling price of $43,500 and a cost of $37,000. The goods were not included in the count because they were sitting on the dock.

5. On December 29, Schuda shipped goods with a selling price of $81,000 and a cost of $51,500 to Reza Sales Corporation FOB shipping point. The goods arrived on January 3. Reza had only ordered goods with a selling price of $13,500 and a cost of $9,300. However, a sales manager at Schuda had authorized the shipment and said that if Reza wanted to ship the goods back next week, it could.

6. Included in the count was $37,500 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Schudas products, it was unlikely that these obsolete parts had any other use. However, management would prefer to keep them on the books at cost, since that is what we paid for them, after all.