Transportation Costs: The costs of delivering the merchandise inventory from the manufacturer to the buyer are termed as transportation cost and are differentiated on the basis of terms of the payment of transportation charges or freight by the buyer or the seller. FOB (Free on Board) Shipping point means that the buyer pays all costs incurred for the delivery of goods once the goods is left from the supplier’s warehouse. FOB (Free on Board) Destination means that the buyer pays all costs incurred for the delivery of goods once the goods is delivered at buyer receiving point. To Describe: Who bear the freight charges at the time of (a) FOB shipping point, and (b) FOB destination.

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Question 4Waterfront Inc. wishes to borrow on a short-term basis withoutreducing its current ratio below 1.25. At present its current assetsand current liabilities are $1,600 and $1,000 respectively. How muchcan Waterfront Inc. borrow?

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Chapter 5, Problem 7DQ

To determine

Transportation Costs: The costs of delivering the merchandise inventory from the manufacturer to the buyer are termed as transportation cost and are differentiated on the basis of terms of the payment of transportation charges or freight by the buyer or the seller.

FOB (Free on Board) Shipping point means that the buyer pays all costs incurred for the delivery of goods once the goods is left from the supplier’s warehouse.

FOB (Free on Board) Destination means that the buyer pays all costs incurred for the delivery of goods once the goods is delivered at buyer receiving point.

To Describe: Who bear the freight charges at the time of (a) FOB shipping point, and (b) FOB destination.

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