ACCT207 Study Guide - Quiz Guide: Consignor, Consignee
8 Sep 2016
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Q5: 1. the goods will be included in millar"s inventory fob destination. 2. goods will be included in branyan"s inventory fob shipping point: millar comp should include goods shipped to a consignee in its inventory. Millar"s goods held on consignment shouldn"t be included in inventory. She should include ,015 (price of hats 3000 + freight 75 purchase discounts 60). Amount paid to negotiate the purchase is a buying cost that normally isn"t included in the cost of inventory b/c of the difficulty of allocating these costs. Buying costs are expensed in the year incurred. Under fifo, latest goods purchased remain in inventory (inventory on balance sheet are close to current cost). Long have higher gross profit b/c cogs include a higher proportion of goods purchased at earlier (lower) costs. The earliest goods purchased remain in inventory (inventory on balance sheet is below current cost). They should report the tv"s as each, totaling 1,750.
