Presented below is a list of items that may or may not be reported as inventory in a company's December 31 balance sheet.

Indicate which of these items would typically be reported as inventory in the financial statements. If an item shouldnotbe reported as inventory, indicate how it should be reported in the financial statements.

Item in

Financial Statement

Financial

Statement

1.Goods out on consignment at another company's store.

select an item

Interest Expense

Not Reported

Advertising Expense

Office Supplies

Short-term Investments

Inventory

Cost of Goods Sold

select a financial statement

Balance Sheet

Income Statement

Not Reported

2.Goods sold on an installment basis (bad debts can be reasonably estimated).

select an item

Short-term Investments

Office Supplies

Inventory

Not Reported

Advertising Expense

Interest Expense

Cost of Goods Sold

select a financial statement

Balance Sheet

Income Statement

Not Reported

3.Goods purchased f.o.b. shipping point that are in transit at December 31.

select an item

Inventory

Interest Expense

Not Reported

Advertising Expense

Short-term Investments

Office Supplies

Cost of Goods Sold

select a financial statement

Balance Sheet

Income Statement

Not Reported

4.Goods purchased f.o.b. destination that are in transit at December 31.

select an item

Not Reported

Interest Expense

Office Supplies

Short-term Investments

Advertising Expense

Inventory

Cost of Goods Sold

select a financial statement

Balance Sheet

Income Statement

Not Reported

5.Goods sold to another company, for which our company has signed an agreement to repurchase at a set price that covers all costs related to the inventory.

select an item

Advertising Expense

Inventory

Short-term Investments

Not Reported

Cost of Goods Sold

Interest Expense

Office Supplies

select a financial statement

Balance Sheet

Income Statement

Not Reported

6.Goods sold where large returns are predictable.

select an item

Office Supplies

Short-term Investments

Not Reported

Cost of Goods Sold

Advertising Expense

Interest Expense

Inventory

select a financial statement

Balance Sheet

Income Statement

Not Reported

7.Goods sold f.o.b. shipping point that are in transit at December 31.

select an item

Advertising Expense

Interest Expense

Inventory

Short-term Investments

Cost of Goods Sold

Office Supplies

Not Reported

select a financial statement

Balance Sheet

Income Statement

Not Reported

8.Freight charges on goods purchased.

select an item

Short-term Investments

Not Reported

Office Supplies

Cost of Goods Sold

Inventory

Advertising Expense

Interest Expense

select a financial statement

Balance Sheet

Income Statement

Not Reported

9.Interest costs incurred for inventories that are routinely manufactured.

select an item

Interest Expense

Advertising Expense

Cost of Goods Sold

Office Supplies

Inventory

Short-term Investments

Not Reported

select a financial statement

Balance Sheet

Income Statement

Not Reported

10.Costs incurred to advertise goods held for resale.

select an item

Not Reported

Interest Expense

Advertising Expense

Inventory

Cost of Goods Sold

Short-term Investments

Office Supplies

select a financial statement

Balance Sheet

Income Statement

Not Reported

11.Materials on hand not yet placed into production by a manufacturing firm.

select an item

Not Reported

Interest Expense

Inventory

Cost of Goods Sold

Office Supplies

Short-term Investments

Advertising Expense

select a financial statement

Balance Sheet

Income Statement

Not Reported

12.Office supplies.

select an item

Cost of Goods Sold

Office Supplies

Short-term Investments

Advertising Expense

Interest Expense

Inventory

Not Reported

select a financial statement

Balance Sheet

Income Statement

Not Reported

13.Raw materials on which a manufacturing firm has started production but which are not completely processed.

select an item

Office Supplies

Cost of Goods Sold

Interest Expense

Short-term Investments

Not Reported

Inventory

Advertising Expense

select a financial statement

Balance Sheet

Income Statement

Not Reported

14.Factory supplies.

select an item

Short-term Investments

Not Reported

Interest Expense

Office Supplies

Advertising Expense

Inventory

Cost of Goods Sold

select a financial statement

Balance Sheet

Income Statement

Not Reported

15.Goods held on consignment from another company.

select an item

Advertising Expense

Cost of Goods Sold

Not Reported

Interest Expense

Office Supplies

Inventory

Short-term Investments

select a financial statement

Balance Sheet

Income Statement

Not Reported

16.Costs identified with units completed by a manufacturing firm but not yet sold.

select an item

Office Supplies

Not Reported

Advertising Expense

Interest Expense

Cost of Goods Sold

Short-term Investments

Inventory

select a financial statement

Balance Sheet

Income Statement

Not Reported

17.Goods sold f.o.b. destination that are in transit at December 31.

select an item

Office Supplies

Advertising Expense

Interest Expense

Short-term Investments

Not Reported

Cost of Goods Sold

Inventory

select a financial statement

Balance Sheet

Income Statement

Not Reported

18.Short-term investments in stocks and bonds that will be resold in the near future.

select an item

Inventory

Cost of Goods Sold

Not Reported

Advertising Expense

Interest Expense

Short-term Investments

Office Supplies

select a financial statement

Balance Sheet

Income Statement

Not Reported