E8.1-8.3

list of items that may agreement to repurchase E8.1 (LO2) (Inventoriable Goods and Costs) Presented below is a lie not be reported as inventory in a company's December 31 balance sheet, 1. Goods out on consignment at another company's store. 2. Goods sold on an installment basis (bad debts can be reasonably estimated 3. Goods purchased Lob. shipping point that are in transit at December 31 4. Goods purchased f.o.b. destination that are in transit at December 31. 3. Goods sold to another company, for which our company has signed an agre a set price that covers all costs related to the inventory. 6. Goods sold where large returns are predictable. 7. Goods sold f.ob. shipping point that are in transit at December 31. 8. Freight charges on goods purchased. 9. Interest costs incurred for inventories that are routinely manufactured. 10. Costs incurred to advertise goods held for resale. 11. Materials on hand not yet placed into production by a manufacturing firm. 12. Office supplies 13. Raw materials on which a manufacturing firm has started production but which are not processed. 14. Factory supplies. 15. Goods held on consignment from another company. but which are not complet 16. Costs identified with units completed by a manufacturing firm but not yet sold. 17. Goods sold f.o.b. destination that are in transit at December 31. 18. Short-term investments in stocks and bonds that will be resold in the near future. Instructions Indicate which of these items would typically be reported as inventory in the financial statements. It item should not be reported as inventory. indicate how it should be reported in the financial statemen E8.2 (LO 2) Excel (Inventoriable Goods and Costs) In your audit of Jose Oliva Company find that a physical inventory on December 31, 2020. showed merchandise with a cost of hand at that date. You also discover the following items were all excluded from the $441,000 ndise with a cost of $441,000 was on onsignor is the Max Suruki 1. Merchandise of $61,000 which is held by Oliva on consignment. The consignor Company. 2. Merchandise costing $38,000 which was shipped by Oliva f.o.b. destination to a cu ber 31, 2020. The customer was expected to receive the merchandise on January 3. Merchandise costing $46,000 which was shipped by Oliva f.o.b. shipping point December 29, 2020. The customer was scheduled to receive the merchandise on 4. Merchandise costing $83,000 shipped by a vendor f.o.b. destination on Decemb. ceived by Oliva on January 4, 2021. on to a customer on Decent In January 6, 2021. 8 point to a customer dise on January 2, 2021 on December 30, 2020, andre ipped by a vendor 1.0.b. shipping point on December 31, 202, and andise costing $51,000 shipped he d by Oliva on January 5, 2021. 5. Merchandise received by Oliv calculate the amount that should appear on Oliva's balance sheet Instructions Based on the above December 31, 2020. he above information, calculate her 31, 2020, for inventory. Goods and Costs) Assume that in an annual audit of Harlowe Inc. at (LO 2) (Inventoriable Good December 31, 2020, you find you find the following transactions near the closing date al machine, fabricated to order for a customer, was finished 1. A special machin er for a customer, was finished and specifically segregated in the in December 31, 2020. The customer was billed on that date and the back part of the shipping machine excluded from inv excluded from inventory although it was shipped on January 4, 2021. was received on January 3, 2021, and the related purchase invoice onuary 5. The invoice showed the shipment was made on December 29, 2020, fab 2. Merchandise costing $2,800 was received on January 3 destination. 3 A packing case containing a product costing $3,400 was standing in the shipping room when the physical inventory was taken. It was not included in the inventory because it was marked "Hold for shipping instructions." Your investigation revealed that the customer's order was dated December 18, 2020, but that the case was shipped and the customer billed on January 10, 2021. The product was a stock item of your client. 4. Merchandise received on January 6, 2021, costing $680 was entered in the purchase journal on January 7, 2021. The invoice showed shipment was made f.o.b. supplier's warehouse on December 31. 020. Because it was not on hand at December 31, it was not included in inventory. 5. Merchandise costing $720 wa You located it in the hands of the pus osting $720 was received on December 28, 2020, and the invoice was not recorded. the hands of the purchasing agent; it was marked "on consignment." Instructions uming that each of the amounts is mate client's inventory, and gives Its is material, state whether the merchandise should be included in the y, and give your reason for your decision on ea F9 Pernetual) Perpetual) Colin Davis Machine Company main- punts for increases during the Materials inventory