Windward Corporation had the following inventory items at 12/31/xx Inventory ite

Question

Windward Corporation had the following inventory items at 12/31/xx Inventory items purchased from another company that cost $2,700 and were in transit on December 31 with shipping terms of FOB Shipping Point. Inventory items purchased from another company that cost $2,600 and were in transit orn December 31 with shipping terms of FOB Destination. Inventory items sold to another company that had cost $3,500 and were in transit on December 31 with shipping terms FOB Shipping Point. Inventory items sold to another company that had cost $2,500 and were in transit on December 31 with shipping terms FOB Destination. How much of the above items should be included in the companys inventory on the December 31 Balance Sheet? $6200

Explanation / Answer

Solution:

Inventory items purchased on FOB shipping point and in transit will included in company inventory on Dec 31, balance sheet.

Inventory item sold on FOB Destination point and in transit will also be included in company inventory on Dec 31, balance sheet.

Therefore total inventroy in transit to be included in balance sheet on dec 31 = $2,700 + $2,500 = $5,200

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