b9bb4975e758d60a02a8590ce2c7fed5958bc8a8.xlsx, Exercise 8-2 Solution, Page 1 of 8, 03/29/2012, 01:32:30
December 31, 2012, showed merchandise with a cost of
was on hand at that date.
You also discover the following items were all excluded from the
1. Merchandise of
which is held by Garza on consignment. The consignor is
the Bontemps Company.
2. Merchandise costing
which was shipped by Garza f.o.b. destination to a
customer on December 31, 2012. The customer was expected to receive the merchandise on
January 6, 2013.
3. Merchandise costing
which was shipped by Garza f.o.b. shipping point to a
customer on December 29, 2012. The customer was scheduled to receive the merchandise on
January 2, 2013.
4. Merchandise costing
shipped by a vendor f.o.b. destination on
December 30, 2012, and received by Garza on January 4, 2013.
5. Merchandise costing
shipped by a vendor f.o.b. seller on December 31, 2012
and received by Garza on January 5, 2013.
Inventory per physical count
Goods in transit to customer, f.o.b. destination
Goods in transit from vendor, f.o.b. shipping point
Inventory to be reported on balance sheet
The consigned goods of $61,000 are not owned by Garza and were properly excluded.
Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting
by Rex A Schildhouse
E8-2 (Inventoriable Costs)
In your audit of Garza Company, you find that a physical inventory on
Based on the above information, calculate the amount that should appear on Garza’s balance sheet at
December 31, 2012, for inventory.
The goods in transit to a customer of $46,000, shipped f.o.b. shipping point, are properly excluded from
the inventory because the title to the goods passed when they left the seller (Garza) and therefore a sale
and related cost of goods sold should be recorded in 2012.
The goods in transit from a vendor of $73,000, shipped f.o.b. destination, are properly excluded from the
inventory because the title to the goods does not pass to Garza until the buyer (Garza) receives them.