Goods in transit: Goods in transit can be described as the inventories which are shipped by the seller by using different mode of transportation but are yet to reach the buyer. The ownership of goods in transit depends on the legal title to the goods which further depends on the terms of the sale. To Indicate: The terms of sale that will result in the goods being included.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 5Q

(a)

To determine

Goods in transit: Goods in transit can be described as the inventories which are shipped by the seller by using different mode of transportation but are yet to reach the buyer. The ownership of goods in transit depends on the legal title to the goods which further depends on the terms of the sale.

To Indicate: The terms of sale that will result in the goods being included.

(b)

To determine

To Explain: The circumstances under which Company B include consigned goods in its inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Mulligan Corporation purchases inventory on account with terms FOB shipping point. The goods are shipped on December 30, 2021, but do not reach Mulligan until January 5, 2022. Mulligan correctly records accounts payable associated with the purchase but does not include this inventory in its 2021 ending inventory count. Required: 1. If an error has been made, explain why. 2. If an error has been made, indicate whether there is an understatement (U), overstatement (O), or no effect (N) on the reported amount of each financial statement element in the current year and following year. Ignore any tax effects.

2. Under which of the following assumptions may the cost of goods sold include the costs of the most latest purchases of the period, even though those purchases were made after the sales took place? Under which of the following assumption may the cost of goods sold is calculated when each sale is made and, therefore, include the cost of the most recent purchases at that time.

Campbell Corporation uses the retsil method to value its inventory. The following information is available for the year 2021: Cost Retail Merchandise inventory, January 1, 2021 Purchases Freight-in Net markups Net narkdowns Net sales $248, 0ee 562, 5e0 18,0e0 $330, e00 890, e00 30, 800 14, 880 850, e00 Required: Determine the December 31, 2021, inventory by applying the conventional retail method using the information provided. (Round ratlo calculation to 2 decimal places (1.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a mlnus sign.) Cost-to-Retall Ratio Cost Retall Beginning inventory 240,000 330,000 Purchases 562,500 890,000 Freight-in 10,000 Net markups 30,000 1,250,000 Net markdowns (14,000) Goods available for sale 812,500 1,236,000 Cast-to-retail percentage Net sales (850,000) Estimated ending inventory at retail 386.000 Estimated ending inventory at cost

Answer 2

Question

Chapter 6, Problem 5Q

(a)

To determine

Goods in transit: Goods in transit can be described as the inventories which are shipped by the seller by using different mode of transportation but are yet to reach the buyer. The ownership of goods in transit depends on the legal title to the goods which further depends on the terms of the sale.

To Indicate: The terms of sale that will result in the goods being included.

(b)

To determine

To Explain: The circumstances under which Company B include consigned goods in its inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 5Q

(a)

To determine

Goods in transit: Goods in transit can be described as the inventories which are shipped by the seller by using different mode of transportation but are yet to reach the buyer. The ownership of goods in transit depends on the legal title to the goods which further depends on the terms of the sale.

To Indicate: The terms of sale that will result in the goods being included.

(b)

To determine

To Explain: The circumstances under which Company B include consigned goods in its inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 5Q

(a)

To determine

Goods in transit: Goods in transit can be described as the inventories which are shipped by the seller by using different mode of transportation but are yet to reach the buyer. The ownership of goods in transit depends on the legal title to the goods which further depends on the terms of the sale.

To Indicate: The terms of sale that will result in the goods being included.

(b)

To determine

To Explain: The circumstances under which Company B include consigned goods in its inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 5Q

(a)

To determine

Goods in transit: Goods in transit can be described as the inventories which are shipped by the seller by using different mode of transportation but are yet to reach the buyer. The ownership of goods in transit depends on the legal title to the goods which further depends on the terms of the sale.

To Indicate: The terms of sale that will result in the goods being included.

(b)

To determine

To Explain: The circumstances under which Company B include consigned goods in its inventory.

Answer 6

Chapter 6, Problem 5Q

(a)

To determine

Goods in transit: Goods in transit can be described as the inventories which are shipped by the seller by using different mode of transportation but are yet to reach the buyer. The ownership of goods in transit depends on the legal title to the goods which further depends on the terms of the sale.

To Indicate: The terms of sale that will result in the goods being included.

Answer 7

Chapter 6, Problem 5Q

(a)

To determine

Goods in transit: Goods in transit can be described as the inventories which are shipped by the seller by using different mode of transportation but are yet to reach the buyer. The ownership of goods in transit depends on the legal title to the goods which further depends on the terms of the sale.

To Indicate: The terms of sale that will result in the goods being included.

Answer 8

(b)

To determine

To Explain: The circumstances under which Company B include consigned goods in its inventory.

Answer 9

(b)

To determine

To Explain: The circumstances under which Company B include consigned goods in its inventory.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 13

Ch. 6 - The key to successful business operations is...Ch. 6 - Prob. 2Q Ch. 6 - What is just-in-time inventory management? What...Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - Prob. 6Q Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - What is the major advantage and major disadvantage...Ch. 6 - The selection of an inventory cost flow method is...

Solution Summary: The author explains that goods in transit depend on the legal title to the goods and the terms of the sale. Company B should include goods shipped to a consignee in its inventory.

Concept explainers

Videos

To Explain: The circumstances under which Company B include consigned goods in its inventory.

Want to see the full answer?

Chapter 6 Solutions