At December 31, Belle Inc. had to take its ending inventory to prepare its annual financial report. You are their new accountant and its your responsibility to decide whether the following items should be counted as their inventory or not.

a. Belle shipped goods costing $1000 to a customer and charged the customer $1,000 on December 25. The goods were shipped with terms FOB destination and the receiving report indicates that the customer will receive the goods on January 4.

b. Merryland Inc. shipped goods to Belle under terms FOB shipping point. The invoice price was $500 plus $75 for freight on December 27. The receiving report indicates that the goods will be received by Belle on January 3.

c. $1400 of inventory that Harolds Inc. shipped to Belle on consignment is in Belles warehouse.

d. Belle issued a purchase order to acquire goods costing $850. The goods were shipped with terms FOB destination on December 28. Belle will receive the goods on January 9.

e. Belle shipped goods to a customer under terms FOB shipping point on December 24. The invoice price was $500 plus $55 for freight; the cost of the items was $350. The receiving report indicates that the goods will be received by the customer on December 31.

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.