Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 6 - Reporting and Analyzing Inventory - Questions: 5

Answer

1) 1 - a 2 - i 3 - ii 2) - b

Work Step by Step

a) - The merchandise will be included in the inventory of the company that has legal title of these goods. i) - Bradshaw's will include the merchandise in its inventory, when the terms are FOB destination. Ownership of the goods passes to the buyer, when it reaches to the destination. ii) - Ecklund's will include the merchandise in its inventory, when the terms are FOB. Ownership of the goods passes to the buyer, when the public carrier accept the goods from the seller. Bradshaw company include consigned goods in its inventory, as the consignee do not take the ownership of goods remained unsold on the date of inventory taken.
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