Question

Peete Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should be included or excluded from the inventory taking.
a. 900 units of inventory shipped on consignment by Peete to another company.
b. 3,000 units of inventory in transit from a supplier shipped FOB destination.
c. 1,200 units of inventory sold but being held for customer pickup.
d. 500 units of inventory held on consignment from another company.

Answer 1

Answer:

a. 900 units of inventory shipped on consignment by Peete to another company.

• INCLUDED IN THE INVENTORY SINCE THE MERCHANDISE BELONGS TO PEETE COMPANY

b. 3,000 units of inventory in transit from a supplier shipped FOB destination.

• NOT INCLUDED IN THE INVENTORY SINCE THE MERCHANDISE BELONGS TO THE SELLER (FOB DESTINATION)

c. 1,200 units of inventory sold but being held for customer pickup.

• NOT INCLUDED IN THE INVENTORY SINCE THE MERCHANDISE BELONGS TO THE CUSTOMER

d. 500 units of inventory held on consignment from another company.

• NOT INCLUDED IN THE INVENTORY SINCE THE MERCHANDISE BELONGS TO THE CONSIGNOR