Merchandise on a consignment basis


Hampton Co. took a physical count of its inventory on December 31. In addition, it had to decide whether or not the following items should be added to this count.

Indicate which items should be added to and which items should not be added to the December 31 inventory count.

a. Merchandise on hand had been sold earlier in the year but had been returned by customers for various warranty repairs.

b. Hampton Co. sent merchandise on a consignment basis on December 31 just prior to the physical count.

c. On December 22, Hampton Co. ordered merchandise on FOB destination terms. The merchandise was shipped by the supplier on December 30 but had not been received by December 31.

d. On December 27, Hampton Co. ordered merchandise on FOB shipping point terms. The merchandise was shipped on December 29 but had not been received by December 31.

e. Merchandise sold FOB shipping point on December 31 was picked up by the freight company just before closing on December 31.

f. Merchandise shipped to a customer FOB destination was picked up by the freight company on December 28 but had not arrived at its destination as of December 31.

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Accounting Basics: Merchandise on a consignment basis
Reference No:- TGS0683898

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