For each transaction of Sealy Company, (a) determine whether or not Sealy owns the goods during transit. (b) If Sealy is responsible for transportation costs, record the entry for shipping costs assuming they are paid in cash and the perpetual inventory system is used. journal entry worksheet Purchased goods FOB shipping point. Transportation costs are $690. Sold goods FOB
For each transaction of Sealy Company, (a) determine whether or not Sealy owns the goods during transit. (b) If Sealy is responsible for transportation costs, record the entry for shipping costs assuming they are paid in cash and the perpetual inventory system is used.
Purchased goods FOB shipping point. Transportation costs are $690.
Sold goods FOB destination. Transportation costs are $290.
Sold goods FOB shipping point. Transportation costs are $440.
Purchased goods FOB destination. Transportation costs are $170.
1.The FOB shipping point indicates that title or ownership of merchandise inventory will be transferred to the buyer when the merchandise inventory leaves the seller's place of business. In other words, when merchandise inventory is in transit, title or ownership is transferred to the buyer.
2. The FOB destination indicates that title or ownership of merchandise inventory will only be transferred to the buyer when the merchandise inventory arrives at the buyer's place of business. In other words, when merchandise inventory is in transit, title or ownership remains with the seller.
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