Goods in transit are included in a purchaser's inventory_______.

a. at any time during transit

b. when the purchaser is responsible for paying freight charges

c. when the supplier is responsible for paying freight charges

d. if the goods are shipped FOB destination

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Patrina SchowalterLv2

13 Feb 2020

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Related questions

Which of the following items should not be included in the cost of ending merchandise inventory?

a. units on consignment

b. purchased units in transit, shipped FOB destination

c. units on hand in the warehoused.

d. both (a) and (c)

carminewoodchuck215

On December 31 of the current year, Plunkett Company reported an ending inventory balance of $215,000. The following additional information is also available:

Plunkett sold and shipped goods costing $38,000 to Savannah Enterprises on December 28 with shipping terms of FOB shipping point. The goods were not included in the ending inventory amount of $215,000.

Plunkett purchased goods costing $44,000 on December 29. The goods were shipped FOB destination and were received by Plunkett on January 2 of the following year. The shipment was a rush order that was supposed to arrive by December 31. These goods were included in the ending inventory balance of $215,000.

Plunkett's ending inventory balance of $215,000 included $15,000 of goods being held on consignment from Carole Company. (Plunkett Company is the consignee.)

Plunkett's ending inventory balance of $215,000 did not include goods costing $95,000 that were shipped to Plunkett on December 27 with shipping terms of FOB destination and were still in transit at year-end.

Based on the above information, the amount that Plunkett should report in ending inventory on December 31 is:

Multiple Choice

A $194,000

B $209,000

C $200,000

D $171,000

E $156,000