Question
What Should Be Included in Inventory? Howard is trying to compute the inventory balance for the December 31, 2011, financial state- ments of his automotive
What Should Be Included in Inventory?
Howard is trying to compute the inventory balance for the December 31, 2011, financial state- ments of his automotive parts shop. He has computed a tentative balance of $61,800 but suspects that several adjustments still need to be made. In particular, he believes that the following could affect his inventory balance:
a. A shipment of goods that cost $2,000 was received on December 28, 2011. It was prop- erly recorded as a purchase in 2011 but not counted with the ending inventory.
b. Another shipment of goods (FOB destination) was received on January 2, 2012, and cost $1,200. It was properly recorded as a purchase in 2012 but was counted with 2011
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