Royal Corporations inventory at December 31, 2021, was $126,000 (at cost) based on a physical count of inventory on hand, before any necessary adjustment for the following:

• Merchandise costing $16,000, shipped f.o.b. shipping point from a vendor on December 27, 2021, was received by Royal on January 5, 2022.
• Merchandise costing $46,000 was shipped to a customer f.o.b. shipping point on December 28, 2021, arrived at the customers location on January 6, 2022.
• Merchandise costing $22,000 was being held on hand for Jess Company on consignment (i.e., Royal is the consignee).
• Estimated sales returns are 20% of annual sales. Sales revenue was $552,000 with a gross profit ratio of 30%.

What amount should Royal Corporation report as inventory in its December 31, 2021, balance sheet?

ultiple Choice

• $197,280.

• $181,280.

• $227,280.

• $225,405.