Question

The Phoenix Corporation's fiscal year ends on December 31. Phoenix determines inventory quantity by a physical count of inventory on hand at the close of business on December 31. The company's controller has asked for your help in deciding if the following items should be included in the year-end inventory count. Required: Determine if each of the items below should be included or excluded from the company's year-end inventory.

1. Merchandise held on consignment for Trout Creek Clothing
2· 3 Goods purchased from a vendor shipped f.o.b. shipping point on December Goods shipped f.o.b. destination on December 28 that arrived at the customer's location on January 4 26 that arrived on January
3. Goods shipped f.o.b. shipping point on December 28 that arrived at the customer's location on January 5.
4. 5.Phoenix had merchandise on consignment at Lisa's Markets, Inc. 6.
7. Freight charges on goods purchased in 3.
Goods purchased from a vendor shipped f.o.b. destination on December 27 that arrived on January 3

Answer 1

1. Yes

2. No

3. No

4. Yes

7. No

Step-by-step explanation:

Phoenix Corporation is having its physical inventory count of December 31st so only that merchandise will be included in count which is present at the stockroom physically. The merchandise which is in transit or is not yet received at the stockroom will not be included. In point 1, merchandise is held on consignment for Trout Creek Clothing which means there is physical existence of the merchandise at the stockroom. In point 2, goods purchased shipped destination on December 28 but arrived at the customer's location on January 4, this will not be included in the count. In point 3, goods shipped on December 28, arrived at the customer's location on January 5, this will also not be included. In point 4, phoenix had merchandise on consignment; this will be included as inventory will be physically present at the stockroom. In point 7, goods purchased on December 27 that arrived on January 3, this is not included as physically goods arrived after December

31st.