Mateo Inc. had the following inventory situations to consider at January 31, its
ID: 2502769 • Letter: M
Question
Mateo Inc. had the following inventory situations to consider at January 31, its year-end.(a) Goods held on consignment for Schrader Corp. since December 12. (b) Goods shipped on consignment to Lyman Holdings Inc. on January 5. (c) Goods shipped to a customer, FOB destination, on January 29 that are still in transit. (d) Goods shipped to a customer, FOB shipping point, on January 29 that are still in transit. (e) Goods purchased FOB destination from a supplier on January 25, that are still in transit. (f) Goods purchased FOB shipping point from a supplier on January 25, that are still in transit. (g) Office supplies on hand at January 31.
If the item should not be included in inventory, state in what account, if any, it should have been recorded.
Mateo Inc. had the following inventory situations to consider at January 31, its year-end.
(a) Goods held on consignment for Schrader Corp. since December 12. (b) Goods shipped on consignment to Lyman Holdings Inc. on January 5. (c) Goods shipped to a customer, FOB destination, on January 29 that are still in transit. (d) Goods shipped to a customer, FOB shipping point, on January 29 that are still in transit. (e) Goods purchased FOB destination from a supplier on January 25, that are still in transit. (f) Goods purchased FOB shipping point from a supplier on January 25, that are still in transit. (g) Office supplies on hand at January 31.
If the item should not be included in inventory, state in what account, if any, it should have been recorded.
Exercise 6-3 (Essay)
Explanation / Answer
Goods held on consignment for someone else should not be included in inventory. They would be included in Schrader Corp. inventory (b) Goods shipped on consignment to Lyman Holdings Inc. on January 5.
Should be included. (c) Goods shipped to a customer, FOB destination, on January 29 that are still in transit.
Should be included. Goods shipped FOB destination are owned by the seller until they reach their destination. (d) Goods shipped to a customer, FOB shipping point, on January 29 that are still in transit.
Should not be included. Goods shipped FOB shipping point become the property of the buyer as soon as they are shipped. (e) Goods purchased FOB destination from a supplier on January 25, that are still in transit.
Should not be included. Should be included in the supplier's inventory. (f) Goods purchased FOB shipping point from a supplier on January 25, that are still in transit.
Should be included. (g) Office supplies on hand at January 31.t t
Should be included in Office Supplies inventory but not merchandise inverynt