Instructions: For each of the above transactions, specify whether the item in qu

Question

Instructions:

For each of the above transactions, specify whether the item in question should be included in ending inventory, and if so, at what amount. (Ignore GST)

P6-1B Banff Limited is trying to determine the value of its ending inventory as of February 28,2017, the company's year-end. The following transactions occurred, and thc accountant asked your help in determining whether they should be recorded or not (a) On February 26, Banff shipped goods costing £800 to a customer and charged the customer £1,000. The goods were shipped with terms FOB shipping point and the receiving report indicates that the customer reccived the goods on March 2. (b) On February 26, Vendor Inc. shipped goods to Banff under terms FOB shipping point. The invoice price was £450 plus £30 for freight. The receiving report indicates that the (c) Banff had £860 of inventory isolated in the warehousc. The inventory is designated for (d) Also included in Banff's warehouse is £700 of inventory that Jasper Producers shipped (e) On February 26, Banff issued a purchase order to acquire goods costing £900. The goods wcre reccived by Banff on March . a customer who has requested that the goods be shipped on March 10 to Banff on consignment. goods were shipped with terms FOB destination on February 27. Banff reccived the goods on March 2. (f) On February 26, Banff shipped goods to a customer under terms FOB destination. Thoe invoice price was £350; the cost of the items was £200. The recciving report indicates that the goods were received by the customer on February 28.

Explanation / Answer

Hi,

Please refer below my comment on each line items you mention in the above question. Please let me know if you have any concern on any point

A-Inventory-out we required to be considered in Feb with $800 as physically good are sent in Feb

B-No need to considered in Feb Inventory as Physically goods are received in March so Considered in March

C-No need to considered in Feb as Physically delivery of goods is in March so Considered in March

D-Inventory-In of $700 required to be considered because as on Feb end these inventory physically available

E-No need to consider this Purchase order in February inventory as actually, we received goods in March

F-Inventory-out of $200 required to be considered as physically goods are sent in February

Thanks,

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