On December 15, 2019, Flanagan purchased goods costing $100,000. The terms were FOB shippingpoint. Costs incurred by Flanagan in connection with the purchase and delivery of the goods were as follows: Normal freight charges$3,000 Handling costs2,000 Insurance on shipment500 Abnormal freight charges for express1,200 Shipping. The goods were
On December 15, 2019, Flanagan purchased goods costing $100,000. The terms were FOB shippingpoint. Costs incurred by Flanagan in connection with the purchase and delivery of the goods were as follows: Normal freight charges$3,000 Handling costs2,000 Insurance on shipment500 Abnormal freight charges for express1,200 Shipping. The goods were
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 15, 2019, Flanagan purchased goods costing $100,000. The terms were FOB shippingpoint. Costs incurred by Flanagan in connection with the purchase and delivery of the goods were as follows:
Normal freight charges$3,000
Handling costs2,000
Insurance on shipment500
Abnormal freight charges for express1,200
Shipping.
The goods were received on December 17, 2019. What is the amount that should be charged to inventory and expense respectively?
A. 3,000 and 3,700
B. 5,000 and 1,700
C. 5,500 and 1, 200
D. 6,700 and 0
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