Physical Inventory Count, Ownership of Goods, and Consigned Goods Video Lessons

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Problem: Bench Company’s Accounts Payable balance at December 31, 2011, was $1,900,000 before considering the following transactions: Goods were in transit from a vendor to Bench on December 31, 2011. The unpaid invoice price was $100,000, and the goods were shipped FOB shipping point on December 29, 2011. The goods were received on January 4, 2012. Goods shipped to Bench FOB destination on December 27, 2011, from a vendor were still in transit. The unpaid invoice price was $50,000 and the goods were received on January 2, 2012. In its December 31, 2011, balance sheet, Bench should report Accounts Payable of a. $1,950,000. b. $1,900,000. c. $2,050,000. d. $2,000,000.

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Problem Details

Bench Company’s Accounts Payable balance at December 31, 2011, was $1,900,000 before considering the following transactions:

  • Goods were in transit from a vendor to Bench on December 31, 2011. The unpaid invoice price was $100,000, and the goods were shipped FOB shipping point on December 29, 2011. The goods were received on January 4, 2012.
  • Goods shipped to Bench FOB destination on December 27, 2011, from a vendor were still in transit. The unpaid invoice price was $50,000 and the goods were received on January 2, 2012.

In its December 31, 2011, balance sheet, Bench should report Accounts Payable of

a. $1,950,000.

b. $1,900,000.

c. $2,050,000.

d. $2,000,000.

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Our tutors rated the difficulty ofBench Company’s Accounts Payable balance at December 31, 201...as medium difficulty.