For each of the following, calculate the cost of inventory reported on the balan

Question

For each of the following, calculate the cost of inventory reported on the balance sheet.

a. The total merchandise on hand at the end of the year as determined by taking a physical inventory is $62,000. Of the $62,000, $8,000 has been sold FOB destination and is awaiting pickup by the carrier.

b. The total merchandise inventory counted at the end of the year was $63,000. Purchases for $6,000 are in transit under FOB shipping point terms.

c. The total merchandise inventory counted at the end of the year was $75,000. Purchases for $5,000 are in transit under FOB destination terms.

Explanation / Answer

a)62000 , since The terms are destination point and the goods are nt shipped yet so....no deduction from inventory

b) 69000 becasue once shipped buyer takes responsibility under shipping point terms

c) 75000 because buyer controls only when they reached under FOB destination terms

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.