Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 7, Problem 1E
Reporting Goods in Transit and Consignment Inventory
Second Chance Clothing (SCC) obtains goods on consignment and through purchase and sells them to others. The following events occurred close to SCC’s October 31 year-end.
______ a. On November 2, SCC received goods on consignment from Apparel Corp.
______ b. On October 31, SCC received goods on consignment from Apparel Corp.
______ c. Goods in transit to SCC were shipped by Shoe, Inc., on October 31, FOB shipping point.
______ d. Goods in transit to SCC were shipped by Shoe, Inc., on October 31, FOB destination.
Required:
Indicate (Yes or No) whether SCC should include each item in its inventory balance at October 31.
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Identify Goods to Be Included in Inventory
Patterson Company has the following items at year-end. Identify which items
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1. Goods in transit sent to a client F.O.B. shipping point.
2. Goods in transit sent to a client F.O.B. destination.
01
O2
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ONone of the above
Purchase-related transactions using perpetual inventory systemThe following selected transactions were completed by Betz Companyduring July of the current year:July 1. Purchased merchandise from Sabol Imports Co., $20,500, terms FOB destination, n/30.3. Purchased merchandise from Saxon Co., $12,000, terms FOB shippingpoint, 2/10, n/com. Prepaid freight of $75 was added to the invoice.5. Purchased merchandise from Schnee Co., $8,000, terms FOBdestination, 2/10, n/30.
6. Issued debit memo to Schnee Co. for merchandise with an invoiceamount of $1,500 returned from purchase on July 5.13. Paid Saxon Co. for invoice of July 3.14. Paid Schnee Co. for invoice of July 4, less debit memo of July 6.
19. Purchased merchandise from Southmont Co., $18,900, terms FOBshipping point, n/eom19. Paid freight of $140 on July 19 purchase from Southmont Co.20. Purchased merchandise from Stevens Co., $33,000, terms FOBdestination, 1/10, n/30.
30. Paid Stevens Co. for invoice of July 20.31. Paid Sabol Imports…
Purchase-Related Transactions Using Perpetual Inventory System
The following selected transactions were completed by Niles Co. during March of the current year:
Mar. 1.
Purchased merchandise from Haas Co., $13,600, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $425 was added to the invoice.
5.
Purchased merchandise from Whitman Co., $13,150, terms FOB destination, n/30.
10.
Paid Haas Co. for invoice of March 1.
13.
Purchased merchandise from Jost Co., $10,600, terms FOB destination, 1/10, n/30.
14.
Issued debit memo to Jost Co. for $2,000 of merchandise returned from purchase on March 13.
18.
Purchased merchandise from Fairhurst Company, $10,300, terms FOB shipping point, n/eom.
18.
Paid freight of $270 on March 18 purchase from Fairhurst Company.
19.
Purchased merchandise from Bickle Co., $11,700, terms FOB destination, 2/10, n/30.
23.
Paid Jost Co. for invoice of March 13, less debit memo of March 14.
29.
Paid Bickle Co. for invoice of March 19.…
Chapter 7 Solutions
Fundamentals Of Financial Accounting
Ch. 7 - What are three goals of inventory management?Ch. 7 - Describe the specific types of inventory reported...Ch. 7 - The chapter discussed four inventory costing...Ch. 7 - Which inventory cost flow method is most similar...Ch. 7 - Where possible, the inventory costing method...Ch. 7 - Contrast the effects of LIFO versus FIFO on ending...Ch. 7 - Contrast the income statement effect of LIFO...Ch. 7 - Several managers in your company are experiencing...Ch. 7 - Explain briefly the application of the LCM rule to...Ch. 7 - Prob. 10Q
Ch. 7 - You work for a made-to-order clothing company,...Ch. 7 - Prob. 12QCh. 7 - (Supplement 7B) Explain why an error in ending...Ch. 7 - Which of the following statements are true...Ch. 7 - The inventory costing method selected by a company...Ch. 7 - Which of the following is not a name for a...Ch. 7 - Which of the following correctly expresses the...Ch. 7 - A New York bridal dress designer that makes...Ch. 7 - If costs are rising, which of the following will...Ch. 7 - Which inventory method provides a better matching...Ch. 7 - Which of the following regarding the lower of cost...Ch. 7 - An increasing inventory turnover ratio a....Ch. 7 - In which of the following situations is an LCM/NRV...Ch. 7 - Matching Inventory Items to Type of Business Match...Ch. 7 - Reporting Goods in Transit Abercrombie Fitch Co....Ch. 7 - Prob. 3MECh. 7 - Reporting Inventory-Related Accounts in the...Ch. 7 - Matching Financial Statement Effects to Inventory...Ch. 7 - Matching Inventory Costing Method Choices to...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Prob. 10MECh. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Reporting Inventory under Lower of Cost or...Ch. 7 - Preparing the Journal Entry to Record Lower of...Ch. 7 - Determining the Effects of Inventory Management...Ch. 7 - Interpreting LCM Financial Statement Note...Ch. 7 - Calculating the Inventory Turnover Ratio and Days...Ch. 7 - Prob. 19MECh. 7 - Prob. 20MECh. 7 - Prob. 21MECh. 7 - (Supplement 7A) Calculating Cost of Goods Sold and...Ch. 7 - (Supplement 7B) Determining the Financial...Ch. 7 - Prob. 24MECh. 7 - Reporting Goods in Transit and Consignment...Ch. 7 - Determining the Correct Inventory Balance Seemore...Ch. 7 - Determining the Correct Inventory Balance Seemore...Ch. 7 - Calculating Cost of Ending Inventory and Cost of...Ch. 7 - Calculating Cost of Ending Inventory and Cost of...Ch. 7 - Prob. 6ECh. 7 - Analyzing and Interpreting the Financial Statement...Ch. 7 - Evaluating the Effects of Inventory Methods on...Ch. 7 - Choosing LIFO versus FIFO When Costs Are Rising...Ch. 7 - Using FIFO for Multiproduct Inventory Transactions...Ch. 7 - Reporting Inventory at Lower of Cost or Market/Net...Ch. 7 - Reporting Inventory at Lower of Cost or Market/Net...Ch. 7 - Analyzing and Interpreting the Inventory Turnover...Ch. 7 - Analyzing and Interpreting the Effects of the...Ch. 7 - Prob. 15ECh. 7 - Analyzing and Interpreting the Financial Statement...Ch. 7 - Prob. 17ECh. 7 - Analyzing the Effects of Four Alternative...Ch. 7 - Evaluating the Income Statement and Income Tax...Ch. 7 - Calculating and Interpreting the Inventory...Ch. 7 - Prob. 4CPCh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Analyzing the Effects of Four Alternative...Ch. 7 - Evaluating the Income Statement and Income Tax...Ch. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - Prob. 3PBCh. 7 - Prob. 4PBCh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Prob. 1COPCh. 7 - (Supplement 7A) Recording Inventory Transactions,...Ch. 7 - (Supplement 7A) Recording Inventory Purchases,...Ch. 7 - (Supplement 7A) Recording Inventory Purchases,...Ch. 7 - Prob. 5COPCh. 7 - Prob. 6COPCh. 7 - Prob. 7COPCh. 7 - Prob. 8COPCh. 7 - Prob. 9COPCh. 7 - Prob. 10COPCh. 7 - Prob. 11COPCh. 7 - Prob. 12COPCh. 7 - Prob. 1SDCCh. 7 - Prob. 2SDCCh. 7 - Critical Thinking: Income Manipulation under the...Ch. 7 - Accounting for Changing Inventory Costs In...
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