(TCO G) In your audit of Garza Company, you find that a physical inventory on De
ID: 2414935 • Letter: #
Question
(TCO G) In your audit of Garza Company, you find that a physical inventory on December 31, 2010, showed merchandise with a cost $441,000 was on hand at that date. You also discover the following items were all excluded from the inventory count. •Merchandise of $61,000, which is held by Garza on consignment. The consignee is the Bontemps Company. •Merchandise costing $33,000, which was shipped by Garza f.o.b. destination to a customer on December 31, 2010. The customer was expected to receive the merchandise on January 6, 2011. •Merchandise costing $46,000, which was shipped by Garza f.o.b. shipping point to a customer on December 29, 2010. The customer was schedule to receive the merchandise on January 2, 2011. •Merchandise costing $73,000 shipped by a vendor f.o.b. destination on December 30, 2010, and received by Garza on January 4, 2011. •Merchandise costing $51,000 shipped by a vendor f.o.b. shipping point on December 31, 2010, and received by Garza on January 5, 2011. Based on the above information, calculate the amount that should appear on Garza’s balance sheet at December 31, 2010, for inventory
Explanation / Answer
TCO G) In your audit of Garza Company, you find that a physical inventory on December 31, 2010, showed merchandise with a cost $441,000 was on hand at that date. You also discover the following items were all excluded from the inventory count. •Merchandise of $61,000, which is held by Garza on consignment. The consignee is the Bontemps Company. •Merchandise costing $33,000, which was shipped by Garza f.o.b. destination to a customer on December 31, 2010. The customer was expected to receive the merchandise on January 6, 2011. •Merchandise costing $46,000, which was shipped by Garza f.o.b. shipping point to a customer on December 29, 2010. The customer was schedule to receive the merchandise on January 2, 2011. •Merchandise costing $73,000 shipped by a vendor f.o.b. destination on December 30, 2010, and received by Garza on January 4, 2011. •Merchandise costing $51,000 shipped by a vendor f.o.b. shipping point on December 31, 2010, and received by Garza on January 5, 2011. Based on the above information, calculate the amount that should appear on Garza’s balance sheet at December 31, 2010, for inventory
Inventory $46,000 will not be included because FOB shipping Point,the title to the goods usually passes to the buyer at the shipping point.
Merchandise costing $73,000 shipped by a vendor f.o.b. destinationwill not be included in Inventory because the title to the goods does not pass to Garza until the buyer (Garza) receives them
TCO G) In your audit of Garza Company, you find that a physical inventory on December 31, 2010, showed merchandise with a cost $441,000 was on hand at that date. You also discover the following items were all excluded from the inventory count. •Merchandise of $61,000, which is held by Garza on consignment. The consignee is the Bontemps Company. •Merchandise costing $33,000, which was shipped by Garza f.o.b. destination to a customer on December 31, 2010. The customer was expected to receive the merchandise on January 6, 2011. •Merchandise costing $46,000, which was shipped by Garza f.o.b. shipping point to a customer on December 29, 2010. The customer was schedule to receive the merchandise on January 2, 2011. •Merchandise costing $73,000 shipped by a vendor f.o.b. destination on December 30, 2010, and received by Garza on January 4, 2011. •Merchandise costing $51,000 shipped by a vendor f.o.b. shipping point on December 31, 2010, and received by Garza on January 5, 2011. Based on the above information, calculate the amount that should appear on Garza’s balance sheet at December 31, 2010, for inventory
Inventory without Adjustments: $441,000 Goods in transit to customer, f.o.b. destination $33,000 Goods in transit from vendor, f.o.b. seller $51,000 Inventory to be reported on balance sheet $525,000 Inventory $61,000 will not be included in Garza's B/s as it is held by Garza on consignment.Inventory $46,000 will not be included because FOB shipping Point,the title to the goods usually passes to the buyer at the shipping point.
Merchandise costing $73,000 shipped by a vendor f.o.b. destinationwill not be included in Inventory because the title to the goods does not pass to Garza until the buyer (Garza) receives them
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.