As the accounting consultant for Lee Company, a merchandising company, you have been asked to assist management in determining the proper accounting for items related to merchandise inventory.

Required:

For each of the following four items, determine whether or not each would be included in the cost of ending merchandise inventory.

Cost of goods consigned in Included? OR Not Included?

Sales commissions Included? OR Not Included?

Cost of goods in transit, purchased, terms: FOB Destination Included? OR Not Included?

Cost of inventory on hand Included? OR Not Included?