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Problem 6-1A Sheffield Limited is trying to determine the value of its ending inventory as of February 28, 2019, the company's year-end. The following transactions
Problem 6-1A Sheffield Limited is trying to determine the value of its ending inventory as of February 28, 2019, the company's year-end. The following transactions occurred, and the accountant asked your help in determining whether they should be recorded or not. For each of the transactions below, specify whether the item in question should be included in ending inventory, and if so, at what amount. (a) On February 26, Sheffield shipped goods costing $2,480 to a customer and charged the customer $3,100. The goods were shipped with terms FOB shipping point and the receiving report indicates that the customer received the goods on March 2. (b) On February 26, Louis Inc. shipped goods to Sheffield under terms FOB shipping point. The invoice price was $450 plus $20 for freight. The receiving report indicates that the goods were received by Sheffield on March 2. (c) Sheffield had $740 of inventory isolated in the warehouse. The inventory is designated for a customer who has requested that the goods be shipped on March 10. (d) Also included in Sheffield's warehouse is $770 of inventory that Ryhn Producers shipped to Sheffield on consignment. (e) On February 26, Sheffield issued a purchase order to acquire goods costing $900. The goods were shipped with terms FOB destination on February 27. Sheffield received the goods on March 2. (f) On February 26, Sheffield shipped goods to a customer under terms FOB destination. The invoice price was $375; the cost of the items was $265. The receiving report indicates that the goods were received by the customer on March 2. (g) Sheffield had damaged goods set aside in the warehouse because they are no longer saleable. These goods originally cost $450, and Sheffield had expected to sell these items for $740
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