Taylor Company reported an unadjusted inventory balance on December 31, Year 1 of $800,000 based on a physical count. The physical inventory count excluded the following items.

Inventory costing $10,000 was shipped from a supplier to Taylor Company, f.o.b. destination, on December 23, Year 1. The inventory arrived at Taylor Company warehouse on January 2, Year 2.

Inventory costing $7,000 was shipped by Taylor Company to a customer, f.o.b. shipping point, on December 28, Year 1. The inventory arrived at the customer on January 5, Year 2.

Determine the adjusted (correct) inventory balance for Taylor Company on December 31, Year 1.

$800,000

$807,000

$810,000

$817,000