As the auditor of Hayes Company for the year ended December 31, 2019, you found the following transactions occurred near its closing date:
1. Merchandise received on January 8, 2020, and costing $800 was recorded as inventory on January 8, 2020.
An invoice on hand showed the shipment was made FOB shipping point on December 31, 2019. Because the merchandise was not on hand at December 31, 2019, it was not included in the 2019 inventory balance.
2. A product costing $600 was in Hayes’s shipping room when the physical inventory was taken. It was not included in the inventory because it was marked “Hold for customer’s shipping instructions.” 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.
3. A machine, made to order for a customer, was finished on December 31, 2019, The customer had inspected it and was satisfied with it. The customer was billed in full for $2,000 on that date. The machine was excluded from inventory, although it was shipped on January 2, 2019.
4. Merchandise costing $800 was received on December 27, 2019, but a purchase was not recorded. The goods were “on consignment from Milliken Company.”
5. Merchandise costing $4,000 was received on January 2, 2020, and the related purchase invoice was recorded on January 5, 2020. The invoice showed that the shipment was made on December 29, 2019, FOB destination.

Required:
For each situation, state whether Hayes should include the merchandise in its inventory. Give your reason for the decision on each item.