Generally, determining the physical quantity that should be included in inventory is a simple matter because it consists of items in the possession of the company. However, at the end of a reporting period its important to determine the ownership of goods that are in transit between the company and its customers as well as between the company and its suppliers. Also, goods on consignment should be included in inventory of the consignor even though the company doesnt have physical possession of the goods. In addition, a company anticipating sales returns includes in inventory the cost of merchandise it estimates will be returned.

Hales Inc. ships goods on December 30 to Osher Inc., who receives the goods on January 2. Both companies have December 31 year-ends. If the goods are shipped f.o.b. shipping point, which of the following statements is (are) correct? (Select all that apply.)

Check All That Apply

• Hales will include the goods in its December 31 inventory.

• Osher will include the goods in its December 31 inventory.

• Hales will record the sale on December 30.

• Hales will record the sale on January 2.

• Osher will record the purchase on December 30.

• Osher will record the purchase on January 2