Question

Which of the following would be included in inventory? Yes or No

(a) Raw materials costs of leather to a manufacturer of leather furniture

(b) The cost of cans of corn held on the shelves of a grocery store

(c) The cost of a truck in the process of being manufactured by an automobile manufacturer

(d) The cost of land being held for development to a property developer

(e) The cost of a van being used as a courtesy vehicle to an automobile service centre

(f) The costs of construction for a home being built for a specific customer to a builder

(g) The cost of soap and paper towels for the washrooms of a restaurant

Answer 1

	Included/Not included in Inventory	Reason:
(a) Raw materials costs of leather to a manufacturer of leather furniture	Included	Cost of raw material is included into raw material inventory.
(b) The cost of cans of corn held on the shelves of a grocery store	Included	Cost of finished goods or traded goods is included into inventory.
(c) The cost of a truck in the process of being manufactured by an automobile manufacturer	Included	Work in progress inventory are also included in the WIP inventory.
(d) The cost of land being held for development to a property developer	Not included	It would not be included because property developer is not going to deal in sale or purchase of land but in sale or purchase of flats or house.
(e) The cost of a van being used as a courtesy vehicle to an automobile service centre	Not included	Automobile service center is not dealing in trading of van.
(f) The costs of construction for a home being built for a specific customer to a builder	Included	Home is always an inventory for builder irrespective of its made in general or for a specific customer.
(g) The cost of soap and paper towels for the washrooms of a restaurant	Not included	Restaurant is not selling soap or paper towels. These are part of Supplies