Waterway Company took a physical inventory on December 31 and determined that goods costing $199,500 were on hand. Not included in the physical count were $25,000 of goods purchased from Oriole Corporation, FOB, shipping point, and $27,000 of goods sold to Kingbird Company for $34,000, FOB destination. Both the Oriole purchase and the Kingbird sale were in transit at year-end.

what amount should waterway report as its december 31 inventory