Concept explainers
Introduction: Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale.
Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost.
(a)
To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?
(b)
To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?
(c)
To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?
(d)
To explain: Consignment and reporting for consignment.
Want to see the full answer?
Check out a sample textbook solutionChapter 8 Solutions
Intermediate Accounting: IFRS Edition
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education