Morton International, Inc., headquartered in Chicago, Illinois, manufactures specialty chemicals, automobile airbags, and salt. Recently, its specialty chemicals business was reorganized, and three manufacturing plants were closed. Profits were generally high, however, mostly because of an improved product mix. The automotive airbag business did very well, with sales more than 30% higher than the previous year. However, toward the end of the year, questions were being raised about the safety of airbags, and this put the future of this business in some jeopardy. The salt business had dramatically increased volume because of the demand for ice-control salt due to an unusually severe winter in the northeastern United States. However, ice-control salt has a low profit margin, and so profits were up only modestly.

The current assets portion of Morton International's balance sheet for the year-ended June 30, 1998 follows.

Assume that the following transactions occurred during June and July of 1998:
1. Office supplies were shipped to Morton by Office Max, FOB destination. The goods were shipped June 29 and received June 30.
2. Morton purchased specialty plastic from Uniroyal Technology for use in airbag manufacture. The goods were shipped FOB shipping point July 1, and were received by Morton July 4.
3. Ford Motor Company purchased 10,000 airbags to be used in the manufacture of new cars. These were shipped FOB shipping point June 30, and were received by Ford July 2.
4. Bassett Furniture shipped office furniture to Morton, FOB destination, June 29. The goods were received July 3.
5. Inland Specialty Chemical shipped Morton chemicals that Morton uses in the manufacture of airbags and other items. The goods were sent FOB shipping point June 29, and were received July 1.
6. Morton purchased new automobiles for its executives from General Motors. The cars were shipped FOB destination June 19, and were received July 2.
7. Morton shipped salt to New York State Public Works, FOB Chicago, June 29. The shipment arrived in Chicago June 30 and in New York July 2.
8. Morton purchased steel, to be used in expanding its manufacturing plant, from Inland Steel, FOB Dallas. The steel was shipped June 30, arrived in Dallas July 2, and at Morton’s plant July 6.
9. Morton shipped packaged salt to Associated Wholesale Grocers FOB Kansas City. The salt was shipped June 30, arrived in Kansas City July 1, and at Associated Wholesale Grocers’ warehouse July 2.

Instructions With the class divided into groups, answer the following:

(a) Which items would be owned by Morton International as of June 30, 1998?

(b) Which transactions involve Morton’s inventory account?
COMMUNICATION ACTIVITIES

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Current assets MORTON INTERNATIONAL, INC. Balance Sheet (partial) Cash and cash equivalents June 30, 1998 (in millions) Receivables, less allowance of $10.8 Inventories Other current assets Total current assets $ 138.0 468.6 381.0 125.4 $1,113.0