1. At year-end, Barr Co. had shipped $12,500 of merchandise FOB destination to Lee Co. Which...
1. At year-end, Barr Co. had shipped $12,500 of merchandise FOB destination to Lee Co. Which company should include the $12,500 of merchandise in transit as part of its year-end inventory?
2. Parris Company has shipped $20,000 of goods to Harlow Co., and Harlow Co. has arranged to sell the good for Parris. Identify the consignor and the consignee. Whicy company should include any unsold goods as part of its inventory?
Homework Answers
| Ans 1 Barr company should include $12500 in inventory as the terms are FOB destination i.e when it | ||||||
| reaches Lee destination than the rights are transferred to lee company till than it’s the inventory of Barr company | ||||||
| In this case it is shipped so the rights remains with Barr company. | ||||||
| Its Bar company | ||||||
| ans 2 | ||||||
| Consignor is the seller and consignee is a buyer | ||||||
| Parris company is consignor | ||||||
| Harlow is consignee | ||||||
| the unsold goods are always included in the inventory of consignor i.e Parris company | ||||||
| If any doubt please comment | ||||||
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