As the accounting consultant for Perez Company, a merchandising company, you have been asked to assist management in determining the proper accounting for items related to merchandise inventory.
Required:
For each of the following four items, determine whether or not each would be included in the cost of ending merchandise inventory.
IncludedNot IncludedInsurance during shipment of purchased inventory
Cost of taking physical inventory
Cost of goods in transit, sold, terms: FOB Shipping Point
Warehouse employees' salaries