Question

10-23 Attendance at Physical Inventory Counting. A processor of frozen foods carries an inven- tory of finished products consisting of 50 different types of items valued at approxi- mately $2,000,000. About $750,000 of this value represents stock produced by the company and billed to customers prior to the audit date. This stock is being held for the customers at a monthly rental charge until they request shipment and is not separate from the company's inventory. The company maintains separate perpetual ledgers at the plant office for both stock owned and stock being held for customers. The cost department also maintains a per- petual record of stock owned. The above perpetual records reflect quantities only.

Answer 1

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​​​​​​Since complete inventory has not been taken at any time, we will have to depend on records and vouchers to come at the count of inventory at the date of audit.