Boilard Inc planned to report inventory of 50 000 based

#992
Boilard Inc. planned to report inventory of $ 50,000 based on its physical count of inventory in
its warehouse at year- end, December 31, 2013. During the audit, the auditor developed the
following additional information:a. Goods from a supplier costing $ 300 are in transit with
Canada Post on December 31, 2013. The terms are F. O. B. shipping point (explained below).
Because these goods had not arrived, they were excluded from the physical inventory count.b.
Boilard delivered samples costing $ 400 to a customer on December 27, 2013, with the
understanding that they would be returned to Boilard on January 18, 2014. Because these
goods were not on hand, they were excluded from the physical inventory count.c. On December
31, 2013, goods in transit to customers, with terms F. O. B. shipping point, amounted to $ 2,000
(the expected delivery date was January 10, 2014). Because the goods had been shipped, they
were excluded from the physical inventory count.d. On December 31, 2013, goods in transit to a
customer, F. O. B. destination, amounted to $ 1,000 and are not expected to arrive at their
destination before January 10, 2014. Because the goods had been shipped, they were not
included in the physical inventory count.Required:Boilard is required to include in inventory all
goods for which it has title. Note that the point where title (ownership) changes hands is
determined by the shipping terms in the sales contract. When goods are shipped “F. O. B.
shipping point,” title changes hands at shipment and the buyer normally pays for shipping.
When they are shipped “F.O.B. destination,” title changes hands on delivery, and the seller
normally pays for shipping. Begin with the $ 50,000 inventory amount, and compute the correct
amount for the ending inventory. Explain the basis for your treatment of each of the preceding
items.View Solution:
Boilard Inc planned to report inventory of 50 000 based

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