(1). Merchandise costing $625wasreceived on December 28, 2019 and the invoice was not recorded. You located it in the hands of the purchasing agent; it was marked “on consignment.”

(2). A packing case containing products costing $816 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, 2019, but that the case was shipped and the customer billed on January 10, 2020. The product was a stock item of your client.

(3). Merchandise received on January 3, 2020, costing $720 was entered in the acquisitions journal on January 4, 2020. The invoice showed shipment was made FOB supplier’s warehouse on December 31, 2019. Because it was not on hand December 31, it was not included in inventory. 4. Merchandise costing $1,822 was received on January 3, 2020, and the related acquisition invoice recorded January 5. The invoice showed the shipment was made on December 29, 2019, FOB destination.

(4). A special machine, fabricated to order for a customer, was finished and in the shipping room on December 31, 2019. The customer was billed on that date and the machine excluded from inventory, although it was shipped on January 4, 2020.

Instructions

Assuming that each of the amounts is material, state whether the merchandise should be included in the client’s inventory, and give your reason for your decision on each item.

Answer rating: 100% (QA)

1 Will be exluded frm the inventry Resn The merhndise is reeived but invie nt rerded nd merhndise se... View the full answer