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To determine the correct amount of inventory that should be reported for Amiable Company at year-end, we need to evaluate the status of each item listed. Here's a step-by-step breakdown:

1. **Items counted in the bodega (4,000,000)**: These items are part of inventory because they are physically counted.
   - **Include: 4,000,000**

2. **Items included in the count specifically segregated per sales contract (100,000)**: Since these items are already segregated for a sales contract, they should not be included in inventory.
   - **Exclude: 100,000**

3. **Items in receiving department, returned by customer, in good condition (50,000)**: These are part of inventory as they are returned and in good condition.
   - **Include: 50,000**

4. **Items ordered and in the receiving department, invoice not received (400,000)**: Even though the invoice has not been received, the items are in the receiving department and are under the company's control.
   - **Include: 400,000**

5. **Items ordered, invoice received but goods not received, FOB destination (300,000)**: FOB destination means ownership transfers when the goods are delivered. Since the goods have not been received yet, they are not part of inventory.
   - **Exclude: 300,000**

6. **Items shipped today, invoice mailed, FOB shipping point (250,000)**: FOB shipping point means ownership transferred when the goods were shipped. These items are no longer in inventory.
   - **Exclude: 250,000**

7. **Items shipped today, invoice mailed, FOB destination (150,000)**: FOB destination means ownership transfers when the goods reach the buyer. Since they have not yet been received by the buyer, these items remain in inventory.
   - **Include: 150,000**

8. **Items currently being used for window display (200,000)**: These items are still owned by the company and thus should be included in inventory.
   - **Include: 200,000**

9. **Items on counter for sale (800,000)**: These items are part of inventory as they are available for sale.
   - **Include: 800,000**

10. **Items in receiving department, refused because of damage (180,000)**: These items are not in good condition and were refused. They should not be part of inventory.
    - **Exclude: 180,000**

11. **Items included in count, damaged and unsalable (50,000)**: These items are unsalable and should be excluded from inventory.
    - **Exclude: 50,000**

12. **Items in the shipping department (250,000)**: These items are still in the company's possession and should be included in inventory.
    - **Include: 250,000**

### Final Calculation:
Now, summing up the amounts to be included:

\[
4,000,000 + 50,000 + 400,000 + 150,000 + 200,000 + 800,000 + 250,000 = 5,850,000
\]

So, the amount that should be reported as inventory is **5,850,000**. However, since this is not listed among the answer choices, the closest amount provided is **5,800,000 (option c)**.

Would you like further clarification or details on this? Here are 5 related questions:

1. What is the difference between FOB shipping point and FOB destination in accounting?
2. Why are damaged or unsalable items excluded from inventory?
3. How are goods in transit treated in accounting for inventory?
4. How do sales contracts affect inventory reporting?
5. What is the importance of understanding invoice terms when calculating inventory?

**Tip:** Always review the terms of delivery (FOB point) carefully when determining whether goods are part of inventory at the end of the period.

Amiable Company provided the following data at year-end to determine what amount should be reported as inventory. The data includes items physically counted, returned by customers, in transit (FOB destination/shipping point), damaged, segregated for sales contracts, and others.

Learn how to calculate year-end inventory for Amiable Company by considering items in transit (FOB terms), segregated for sales contracts, damaged items, and returns. The problem involves determining what should be included in the final inventory calculation.

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