Chapter 7, Problem 7.1E

Reporting Goods in Transit and Consignment Inventory

Second Chance Clothing (SCC) obtains goods on consignment and through purchase and sells them to others. The following events occurred close to SCC’s October 31 year-end.

______ a. On November 2, SCC received goods on consignment from Apparel Corp.

______ b. On October 31, SCC received goods on consignment from Apparel Corp.

______ c. Goods in transit to SCC were shipped by Shoe, Inc., on October 31, FOB shipping point.

______ d. Goods in transit to SCC were shipped by Shoe, Inc., on October 31, FOB destination.

Required:

Indicate (Yes or No) whether SCC should include each item in its inventory balance at October 31.