Reference no: EM133185960

Question - You are asked to travel to Vienna, Austria, to observe and verify the Vienna branch inventory of one of your clients.  You arrived on the day Thursday, December 30, and found that the inventory procedure just started.  You see the loading and unloading container car and ask the supervisor warehouse, Buck Rogers, how he plans to inventory the contents of the car.  He replied, "We will not include inventory in the inventory balance."

Later that day, you ask for an invoice and bill for the delivery of the goods from the accounting department.  In the invoice, various items, prices, and information are listed related to the goods in the container being unloaded.  Information stated in the invoice is the container shipped on December 24th from Berlin, Germany, f.o.b.  Berlin, and the total invoice price of the goods in the car is €35,300.  The shipping cost of the goods listed on the shipping bill is €1,500. Payment terms are n/30.  You get information from the Accounting that the invoice will be recorded in January.

Based on the above case, it is requested:

1. Give your explanation, whether your client has obligations that must be recorded as of December 31? Explain the accounting principles.

2. Is there a journal that must be made by your client so that the inventory balance reflect the actual balance as of December 31?  If so, keep a journal. This is assuming, your client uses a perpetual inventory system.

3. What are the reasons for your client to delay taking notes the inventory transaction?