A retailer incurred the following costs related to a purchase of inventory: • • Base purchase cost: $12,400 Freight charges (FOB shipping point): $780 Additional acquisition costs: $1,350 Insurance during transit: $470 What is the total cost of merchandise inventory for the buyer?

A retailer incurred the following costs related to a purchase of inventory: • • Base purchase cost: $12,400 Freight charges (FOB shipping point): $780 Additional acquisition costs: $1,350 Insurance during transit: $470 What is the total cost of merchandise inventory for the buyer?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 6E: Goods in Transit Gravais Company made two purchases on December 29, 2019. One purchase for 3,000 was...

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Question

General accounting question

A retailer incurred the following costs related to a
purchase of inventory:
•
•
Base purchase cost: $12,400
Freight charges (FOB shipping point): $780
Additional acquisition costs: $1,350
Insurance during transit: $470
What is the total cost of merchandise inventory for the
buyer?

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Goods in Transit Gravais Company made two purchases on December 29, 2019. One purchase for 3,000 was shipped FOB destination, and the second for 4,000 was shipped FOB shipping point. Neither purchase had been received nor paid for on December 31, 2019. Required: Which of these purchases, if either, does Gravais include in inventory on December 31, 2019? What is the cost?
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Needed for the Correct answer
s
Financial accounting
r 个 O any purchased inventory for $2,500 from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company paid the shipper $100 cash for freight in. The company then returned damaged goods worth $500. The invoice was then paid eight days after the invoice date. Assuming that there was no beginning inventory balance, the cost of inventory would be (Assume a perpetual inventory system.) OA. $1,960 B. $2,060 OC. $2.400 S