On December 15, 2022, LYCHEE Company purchased goods costing ₱ 100,000. The terms were FOB shipping point. Costs incurred by the entity in connection with the purchase and delivery of the goods were as follows: Normal freight charge ₱ 3,000 Handling cost ₱ 2,000 Insurance on shipment ₱ 500 Abnormal freight charge for express shipping ₱ 1,200 The goods were received on December 18, 2022. 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
On December 15, 2022, LYCHEE Company purchased goods costing ₱ 100,000. The terms were FOB shipping point. Costs incurred by the entity in connection with the purchase and delivery of the goods were as follows: Normal freight charge ₱ 3,000 Handling cost ₱ 2,000 Insurance on shipment ₱ 500 Abnormal freight charge for express shipping ₱ 1,200 The goods were received on December 18, 2022. 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 15, 2022, LYCHEE Company purchased goods costing ₱ 100,000. The terms were FOB shipping point. Costs incurred by the entity in connection with the purchase and delivery of the goods were as follows:
| Normal freight charge |
₱ 3,000 |
| Handling cost |
₱ 2,000 |
| Insurance on shipment |
₱ 500 |
| Abnormal freight charge for express shipping |
₱ 1,200 |
The goods were received on December 18, 2022. 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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