Given the Following Items and Costs as of the Balance

Given the following items and costs as of the balance sheet date,determine the value of Faltron Company's merchandise inventory.
$1,000 goods sold by Faltron to another company.The goods are in transit and shipping terms are FOB destination.
$2,000 goods sold by another company to Faltron.The goods are in transit and shipping terms are FOB destination.
$3,000 owned by Faltron but in the possession of another company the consignee.
Damaged goods owned by Faltron which originally cost $4,000,but which now have a $500 net realizable value.

A) $10,000
B) $6,500
C) $5,500
D) $5,000
E) $4,500