Generally, determining the physical quantity that should be included in inventory is a simple matter because...
Generally, determining the physical quantity that should be included in inventory is a simple matter because it consists of items in the possession of the company. However, at the end of a reporting period it’s important to determine the ownership of goods that are in transit between the company and its customers as well as between the company and its suppliers. Also, goods on consignment should be included in inventory of the consignor even though the company doesn’t have physical possession of the goods. In addition, a company anticipating sales returns includes in inventory the cost of merchandise it estimates will be returned.
Hales Inc. ships goods on December 30 to Osher Inc., who receives the goods on January 2. Both companies have December 31 year-ends. If the goods are shipped f.o.b. shipping point, which of the following statements is (are) correct? (Select all that apply.)
Check All That Apply
-
Hales will include the goods in its December 31 inventory.
-
Osher will include the goods in its December 31 inventory.
-
Hales will record the sale on December 30.
- Hales will record the sale on January 2.
-
Osher will record the purchase on December 30.
-
Osher will record the purchase on January 2
Homework Answers
Answer to the above question:
The following statements are correct:
A) Osher will include the goods in its December 31 inventory.
B) Hales will record the sale on December 30.
C) Osher will record the purchase on December 30.
Add Answer to:
Generally, determining the physical quantity that should be
included in inventory is a simple matter because...
Windsor Company took a physical inventory on December 31 and determined that goods costing $189,800 were...
Windsor Company took a physical inventory on December 31 and
determined that goods costing $189,800 were on hand. Not included
in the physical count were $26,130 of goods purchased from Pelzer
Corporation, f.o.b. shipping point, and $23,420 of goods sold to
Alvarez Company for $30,660, f.o.b. destination. Both the Pelzer
purchase and the Alvarez sale were in transit at year-end. What
amount should Windsor report as its December 31
inventory?
December 31 inventory
$
Exercise 8-2
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Godchaux Inc. took a physical inventory at December 31, 2019 and determined that €395,000 of goods were on hand. In addition, the following items were not included in the physical count: (1) €60,000 of goods purchased were in transit, shipped f.o.b. destination (goods were received by Godchaux three days on January 3, 2020) and (2) the company shipped f.o.b. destination €25,000 worth of inventory on December 29. The goods arrived at the buyer's place of business on January 2, 2020....
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OP 8-1 What Should Be Included in Inventory? Identify what items and costs should be included...
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Concord Corporation took a physical inventory on December 31 and determined that goods costing $182,000 were...
Concord Corporation took a physical inventory on December 31 and determined that goods costing $182,000 were on hand. Not included in the physical count were $25,000 of goods purchased from Skysong, Inc., FOB, shipping point, and $27,000 of goods sold to Sheridan Company for $35,000, FOB destination. Both the Skysong purchase and the Sheridan sale were in transit at year-end. What amount should Concord report as its December 31 inventory? Ending Inventory
Windsor Company took a physical inventory on December 31 and
determined that goods costing $189,800 were on hand. Not included
in the physical count were $26,130 of goods purchased from Pelzer
Corporation, f.o.b. shipping point, and $23,420 of goods sold to
Alvarez Company for $30,660, f.o.b. destination. Both the Pelzer
purchase and the Alvarez sale were in transit at year-end. What
amount should Windsor report as its December 31
inventory?
December 31 inventory
$
Exercise 8-2
In your audit of...
The unadjusted inventory balance of Sara Ann Corp. is $450,000 on December 31, 2020, based on a physical inventory count. The following items must be considered before the inventory valuation is finalized. a. On December 31, the physical inventory excluded $450 of merchandise inventory shipped to Sara Ann Corp. from a vendor f.o.b. shipping point that arrived on January 1, 2021. b. On December 31, the physical inventory excluded $16,200 of merchandise inventory held on consignment by a customer. Sara...
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Peete Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should be included or excluded from the inventory taking. (a) 900 units of inventory shipped on consignment by Peete to another company. (b) 3,000 units of inventory in transit from a supplier shipped FOB destination. (c) 1,200 units of inventory sold but being held for customer pickup. (d) 500 units of inventory held on consignment from another company. We were unable to transcribe...
During your audit of Patti Company's ending inventory at December 31, 2017, you find the following inventory accounting errors a. Goods in Patti's warehouse on consignment from Valley, Inc., were included in Patti's ending inventory b. On December 31, 2017, Patti received $4,700 worth of inventory, which was included in the 2017 ending inventory. However, the invoice on this merchandise was not received by Patti until Janua 3, 2018, at which time the purchase was recorded. The purchase should have...
Godchaux Inc. took a physical inventory at December 31, 2019 and determined that €395,000 of goods were on hand. In addition, the following items were not included in the physical count: (1) €60,000 of goods purchased were in transit, shipped f.o.b. destination (goods were received by Godchaux three days on January 3, 2020) and (2) the company shipped f.o.b. destination €25,000 worth of inventory on December 29. The goods arrived at the buyer's place of business on January 2, 2020....
OP 8-1 What Should Be Included in Inventory? Identify what items and costs should be included in inventory and cost of goods sold. Howard is trying to compute the inventory balance for the December 31, 2017, financial statements of his automotive parts shop. He has computed a tentative balance of NT$61,800 but suspects that several adjustments still need to be made. In particular, he believes that the following could affect his inventory balance: a. A shipment of goods that cost...
Concord Corporation took a physical inventory on December 31 and determined that goods costing $182,000 were on hand. Not included in the physical count were $25,000 of goods purchased from Skysong, Inc., FOB, shipping point, and $27,000 of goods sold to Sheridan Company for $35,000, FOB destination. Both the Skysong purchase and the Sheridan sale were in transit at year-end. What amount should Concord report as its December 31 inventory? Ending Inventory
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