Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

. A company makes all of its purchases and sales using FOB shipping point. At the end of the year, the company had the following

. A company makes all of its purchases and sales using FOB shipping point. At the end of the year, the company had the following two transactions that were correctly recorded: < Purchases. Inventory costing $40,000 is shipped by the seller on December 28 and received by the company on January 4. < Sales. Inventory costing $30,000 is sold to a customer for $48,000. It is shipped on December 28 to the customer and arrives on January 4. If this company had chosen to make these transactions FOB destination rather than FOB shipping point, how would that decision have impacted the reported amount of inventory on the year-end balance sheet? a. Reported inventory would have been $10,000 higher. b. Reported inventory would have been $10,000 lower. c. Reported inventory would have been $40,000 higher. d. Reported inventory would have been $40,000 lower.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: David Ricchiute

5th Edition

0538869526, 978-0538869522

More Books

Students also viewed these Accounting questions

Question

Why is interest in portable benefits in health care increasing?

Answered: 1 week ago