Presented below is a list of items that may or may not be reported as inventory in a company's Dec 31 balance sheet.

Indicate which of these items would typically be reported as inventory in the financial statements. If an item should not be reported as inventory, indicate how it should be reported in the financial statements.

1) Goods out on consignment at another company's store.

2) Goods sold on an installment basis (bad debts can be reasonably estimated).

3) Goods purchased f. o.b. shipping point that are in transit at Dec 31.

4) Goods purchased f. o.b. destination that are in transit at Dec 31.

5) Goods sold to another company, for which our company has signed an agreement to repurchase at a set price that covers all costs related to the inventory.

6) Goods sold where large returns are predictable.

7) Goods sold f. o.b. shipping point that are in transit at Dec 31.

8) Freight charges on goods purchased.

9) Interest costs incurred for inventories that are routinely manufactured.

10) Costs incurred to advertise goods held for sale.

11) Materials on hand not yet placed into production by a manufacturing firm.

12) Office supplies.

13) Raw materials on which a manufacturing firm has started production but which are not completely processed.

14) Factory supplies.

15) Goods held on consignmnet from another company.

16) Costs identified with units completed by a manufacturing firm but not yet sold.

17) Goods sold f. o.b. destination that are in transit at Dec 31.

18) Short-term investments in stocks and bonds that will be resold in the near future.

Please refer to Explanation.

Explanation:

I listed the Item the entry falls under in the Financial Statements next to the entry. The Financial Statement into which the entry goes is listed in Brackets.

1) Goods out on consignment at another company's store. - INVENTORY ( BALANCE SHEET)

2) Goods sold on an installment basis (bad debts can be reasonably estimated). - COST OF GOODS SOLD (INCOME STATEMENT)

3) Goods purchased f.o.b. shipping point that are in transit at Dec 31. INVENTORY (BALANCE SHEET)

4) Goods purchased f.o.b. destination that are in transit at Dec 31. NOT REPORTED in Financial Statements

5) Goods sold to another company, for which our company has signed an agreement to repurchase at a set price that covers all costs related to the inventory. INVENTORY (BALANCE SHEET)

6) Goods sold where large returns are predictable. COST OF GOODS SOLD (INCOME STATEMENT)

7) Goods sold f.o.b. shipping point that are in transit at Dec 31. COST OF GOODS SOLD (INCOME STATEMENT)

8) Freight charges on goods purchased. INVENTORY (BALANCE SHEET)

9) Interest costs incurred for inventories that are routinely manufactured. INTEREST EXPENSES (INCOME STATEMENT)

10) Costs incurred to advertise goods held for sale. ADVERTISING EXPENSE (INCOME STATEMENT)

11) Materials on hand not yet placed into production by a manufacturing firm. INVENTORY (BALANCE SHEET)

12) Office supplies. OFFICE SUPPLIES (BALANCE SHEET)

13) Raw materials on which a manufacturing firm has started production but which are not completely processed. INVENTORY(BALANCE SHEET)

14) Factory supplies. INVENTORY (BALANCE SHEET)

15) Goods held on consignmnet from another company. NOT REPORTED IN FINANCIAL STATEMENTS

16) Costs identified with units completed by a manufacturing firm but not yet sold. INVENTORY (BALANCE SHEET)

17) Goods sold f.o.b. destination that are in transit at Dec 31. INVENTORY (BALANCE SHEET)

18) Short-term investments in stocks and bonds that will be resold in the near future. SHORT TERM INVESTMENTS (BALANCE SHEET).

If you need any clarification do react or comment.

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