Question

Mateo Inc. had the following inventory situations to consider at January 31, its year-end.

(a) Goods held on consignment for Schrader Corp. since December 12.
(b) Goods shipped on consignment to Lyman Holdings Inc. on January 5.
(c) Goods shipped to a customer, FOB destination, on January 29 that are still in transit.
(d) Goods shipped to a customer, FOB shipping point, on January 29 that are still in transit.
(e) Goods purchased FOB destination from a supplier on January 25, that are still in transit.
(f) Goods purchased FOB shipping point from a supplier on January 25, that are still in transit.
(g) Office supplies on hand at January 31.
If the item should not be included in inventory, state in what account, if any, it should have been recorded?

Answer 1

Answer and Explanation:

The explanations are as follows:

a) If the goods held on consignment for someone else so the same would not be involved as it would be included in S Corp inventory

(b) It Should be included.

(c) It Should be included.

(d) It Should not be included.

(e) It Should not be included. It would be included in supplier inventory

(f) It Should be included.

(g) It should be included in the office supplies only