Inventory ownership Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn’s house. At the end of the current period., Emma looks over her inventory and finds that she has: 1,300 units (products) in her basement, 20 of which were damaged by water and cannot be sold. 350 units in her van, ready to deliver per a customer order, terms FOB destination. 80 units out on consignment to a friend who owns a retail store. How many units should Emma include in her company’s period-end inventory?

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 6, Problem 1QS

Inventory ownership
Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn’s house. At the end of the current period., Emma looks over
her inventory and finds that she has:

1,300 units (products) in her basement, 20 of which were damaged by water and cannot be sold.
350 units in her van, ready to deliver per a customer order, terms FOB destination.
80 units out on consignment to a friend who owns a retail store.

How many units should Emma include in her company’s period-end inventory?

Expert Solution & Answer

To determine

Introduction:

FOB destination:

FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer's destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer's destination. In case of FOB destination, the goods in transit should be included in the seller inventory.

Consignment:

Consignment is a process of selling merchandise, where the seller sends goods to its agent for sale. In this process, the seller is called the consignor and the agent selling the goods on behalf of the seller is called the consignee. The unsold merchandises on consignment are included in the inventory of the consignor and not the consignee.

To Calculate:

The number of units in the period end inventory

Answer to Problem 1QS

Solution:

The number of units in the period end inventory should be 1,710 units

Explanation of Solution

The numbers of units in the period end inventory are calculated as follows:

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter 6, Problem 1QS

Note:

In case of GOF destination terms, the goods in transit belong to the seller, hence 350 units are added in the ending inventory.
The unsold merchandises on consignment are included in the inventory of the consignor; hence 80 units are added in the ending inventory.

Conclusion

Hence, it can be concluded that the number of units in the period end inventory should be 1,710 units

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

What is the budgeted cost of direct materials?

Wagner Manufacturing uses direct labor-hours to calculate its predetermined overhead rate. At the beginning of the year, the estimated manufacturing overhead was $420,000. At year-end, actual direct labor-hours were 30,000 hours, the actual manufacturing overhead was $410,000, and the company had overapplied overhead of $10,000. Calculate the predetermined overhead rate per direct labor-hour.

The following labor standards have been established for a particular product: • • Standard labor hours per unit = 2.0 hours Standard labor rate = $15.50 per hour The following data pertain to operations concerning the product for the last month: • Actual hours worked = 4,200 hours • Actual total labor cost = $63,000 • Actual output = 2,000 units Compute the labor rate variance for the month.

Answer 2

Textbook Question

Chapter 6, Problem 1QS

Inventory ownership
Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn’s house. At the end of the current period., Emma looks over
her inventory and finds that she has:

1,300 units (products) in her basement, 20 of which were damaged by water and cannot be sold.
350 units in her van, ready to deliver per a customer order, terms FOB destination.
80 units out on consignment to a friend who owns a retail store.

How many units should Emma include in her company’s period-end inventory?

Expert Solution & Answer

To determine

Introduction:

FOB destination:

FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer's destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer's destination. In case of FOB destination, the goods in transit should be included in the seller inventory.

Consignment:

Consignment is a process of selling merchandise, where the seller sends goods to its agent for sale. In this process, the seller is called the consignor and the agent selling the goods on behalf of the seller is called the consignee. The unsold merchandises on consignment are included in the inventory of the consignor and not the consignee.

To Calculate:

The number of units in the period end inventory

Answer to Problem 1QS

Solution:

The number of units in the period end inventory should be 1,710 units

Explanation of Solution

The numbers of units in the period end inventory are calculated as follows:

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter 6, Problem 1QS

Note:

In case of GOF destination terms, the goods in transit belong to the seller, hence 350 units are added in the ending inventory.
The unsold merchandises on consignment are included in the inventory of the consignor; hence 80 units are added in the ending inventory.

Conclusion

Hence, it can be concluded that the number of units in the period end inventory should be 1,710 units

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 6, Problem 1QS

Inventory ownership
Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn’s house. At the end of the current period., Emma looks over
her inventory and finds that she has:

1,300 units (products) in her basement, 20 of which were damaged by water and cannot be sold.
350 units in her van, ready to deliver per a customer order, terms FOB destination.
80 units out on consignment to a friend who owns a retail store.

How many units should Emma include in her company’s period-end inventory?

Expert Solution & Answer

To determine

Introduction:

FOB destination:

FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer's destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer's destination. In case of FOB destination, the goods in transit should be included in the seller inventory.

Consignment:

Consignment is a process of selling merchandise, where the seller sends goods to its agent for sale. In this process, the seller is called the consignor and the agent selling the goods on behalf of the seller is called the consignee. The unsold merchandises on consignment are included in the inventory of the consignor and not the consignee.

To Calculate:

The number of units in the period end inventory

Answer to Problem 1QS

Solution:

The number of units in the period end inventory should be 1,710 units

Explanation of Solution

The numbers of units in the period end inventory are calculated as follows:

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter 6, Problem 1QS

Note:

In case of GOF destination terms, the goods in transit belong to the seller, hence 350 units are added in the ending inventory.
The unsold merchandises on consignment are included in the inventory of the consignor; hence 80 units are added in the ending inventory.

Conclusion

Hence, it can be concluded that the number of units in the period end inventory should be 1,710 units

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 6, Problem 1QS

Inventory ownership
Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn’s house. At the end of the current period., Emma looks over
her inventory and finds that she has:

1,300 units (products) in her basement, 20 of which were damaged by water and cannot be sold.
350 units in her van, ready to deliver per a customer order, terms FOB destination.
80 units out on consignment to a friend who owns a retail store.

How many units should Emma include in her company’s period-end inventory?

Expert Solution & Answer

To determine

Introduction:

FOB destination:

FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer's destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer's destination. In case of FOB destination, the goods in transit should be included in the seller inventory.

Consignment:

Consignment is a process of selling merchandise, where the seller sends goods to its agent for sale. In this process, the seller is called the consignor and the agent selling the goods on behalf of the seller is called the consignee. The unsold merchandises on consignment are included in the inventory of the consignor and not the consignee.

To Calculate:

The number of units in the period end inventory

Answer to Problem 1QS

Solution:

The number of units in the period end inventory should be 1,710 units

Explanation of Solution

The numbers of units in the period end inventory are calculated as follows:

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter 6, Problem 1QS

Note:

In case of GOF destination terms, the goods in transit belong to the seller, hence 350 units are added in the ending inventory.
The unsold merchandises on consignment are included in the inventory of the consignor; hence 80 units are added in the ending inventory.

Conclusion

Hence, it can be concluded that the number of units in the period end inventory should be 1,710 units

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Introduction:

FOB destination:

FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer's destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer's destination. In case of FOB destination, the goods in transit should be included in the seller inventory.

Consignment:

Consignment is a process of selling merchandise, where the seller sends goods to its agent for sale. In this process, the seller is called the consignor and the agent selling the goods on behalf of the seller is called the consignee. The unsold merchandises on consignment are included in the inventory of the consignor and not the consignee.

To Calculate:

The number of units in the period end inventory

Answer to Problem 1QS

Solution:

The number of units in the period end inventory should be 1,710 units

Explanation of Solution

The numbers of units in the period end inventory are calculated as follows:

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter 6, Problem 1QS

Note:

In case of GOF destination terms, the goods in transit belong to the seller, hence 350 units are added in the ending inventory.
The unsold merchandises on consignment are included in the inventory of the consignor; hence 80 units are added in the ending inventory.

Conclusion

Hence, it can be concluded that the number of units in the period end inventory should be 1,710 units

Answer 8

Expert Solution & Answer

To determine

Introduction:

FOB destination:

FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer's destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer's destination. In case of FOB destination, the goods in transit should be included in the seller inventory.

Consignment:

Consignment is a process of selling merchandise, where the seller sends goods to its agent for sale. In this process, the seller is called the consignor and the agent selling the goods on behalf of the seller is called the consignee. The unsold merchandises on consignment are included in the inventory of the consignor and not the consignee.

To Calculate:

The number of units in the period end inventory

Answer to Problem 1QS

Solution:

The number of units in the period end inventory should be 1,710 units

Explanation of Solution

The numbers of units in the period end inventory are calculated as follows:

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter 6, Problem 1QS

Note:

In case of GOF destination terms, the goods in transit belong to the seller, hence 350 units are added in the ending inventory.
The unsold merchandises on consignment are included in the inventory of the consignor; hence 80 units are added in the ending inventory.

Conclusion

Hence, it can be concluded that the number of units in the period end inventory should be 1,710 units

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Introduction:

FOB destination:

FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer's destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer's destination. In case of FOB destination, the goods in transit should be included in the seller inventory.

Consignment:

Consignment is a process of selling merchandise, where the seller sends goods to its agent for sale. In this process, the seller is called the consignor and the agent selling the goods on behalf of the seller is called the consignee. The unsold merchandises on consignment are included in the inventory of the consignor and not the consignee.

To Calculate:

The number of units in the period end inventory

Answer 12

Answer to Problem 1QS

Solution:

The number of units in the period end inventory should be 1,710 units

Answer 13

Explanation of Solution

The numbers of units in the period end inventory are calculated as follows:

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter 6, Problem 1QS

Note:

In case of GOF destination terms, the goods in transit belong to the seller, hence 350 units are added in the ending inventory.
The unsold merchandises on consignment are included in the inventory of the consignor; hence 80 units are added in the ending inventory.

Answer 14

Conclusion

Hence, it can be concluded that the number of units in the period end inventory should be 1,710 units

Answer 15

Ch. 6 - Inventory ownership Homestead Crafts, a...Ch. 6 - QS 6-2 Inventory costs C2 A car dealer acquires a...Ch. 6 - Prob. 3QS Ch. 6 - Prob. 4QS Ch. 6 - Perpetual: Inventory costing with FIFO P1 A...Ch. 6 - Perpetual: Inventory costing with LIFO Refer to...Ch. 6 - Perpetual Inventory costing with weighted average...Ch. 6 - Periodic: Inventory costing with FIFO P3 Refer to...Ch. 6 - Periodic: Inventory costing with LIFO Refer to the...Ch. 6 - Periodic: Inventory costing with weighted average...

Concept explainers

Videos

Answer to Problem 1QS

Explanation of Solution

Want to see more full solutions like this?

Chapter 6 Solutions