Houghton had $680 of inventory isolated in the warehouse. The inventory is desig

Question

Houghton had $680 of inventory isolated in the warehouse. The inventory is designated for a customer who has requested that the goods be shipped on March 10. Also included in Houghton's warehouse is $870 of inventory that Korenic Producers shipped to Houghton on consignment. On February 26, Houghton issued a purchase order to acquire goods costing $1,180. The goods were shipped with terms FOB destination on February 27. Houghton received the goods on March 2. On February 26, Houghton shipped goods to a customer under terms FOB destination. The invoice price was $375; the cost of the items was $280. The receiving report indicates that the goods were received by the customer on March 2.

Explanation / Answer

Feb 26 :cost of Inventory will be included in houghton inventory balance as sales is made at FOB destination ,that is until goods are reached to customer ,it will continue to be included in sellers inventory .

Cost of inventory included = $ 280

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