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During 2010 Ebert Corporation transferred inventory to Holger Corporation and agreed to repurchase the merchandise early in 2011.Holger then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Ebert.In 2011 when Ebert repurchased the inventory, Holger used the proceeds to repay its bank loan.
-On whose books should the cost of the inventory appear at the December 31, 2010 balance sheet date?
A)Ebert Corporation
B)Holger Corporation
C)Norwalk Bank
D)Holger Corporation, with Ebert making appropriate note disclosure of the transaction

Question

Use the following information for questions 
During 2010 Ebert Corporation transferred inventory to Holger Corporation and agreed to repurchase the merchandise early in 2011.Holger then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Ebert.In 2011 when Ebert repurchased the inventory, Holger used the proceeds to repay its bank loan.
-On whose books should the cost of the inventory appear at the December 31, 2010 balance sheet date?
A)Ebert Corporation
B)Holger Corporation
C)Norwalk Bank
D)Holger Corporation, with Ebert making appropriate note disclosure of the transaction

Quizplus · Accepted Answer

The inventory was transferred from Ebert to Holger, but since Ebert agreed to repurchase the inventory, they still retain ownership and therefore should record the inventory on their books at its cost at the balance sheet date of December 31, 2010.

Use the Following Information for Questions