Perpetual Inventory System: The perpetual inventory system records and updates the inventory after each and every transaction. The inventory balance is updated after each transaction and it is kept up to date at every time. FOB shipping point: FOB shipping point stands for Free On Board shipping point. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are shipped from the seller’s place. The goods in transit belong to the buyer and buyer bears the cost of transportation after the shipping point. In case of FOB shipping point, the goods in transit should be included in the buyer’s inventory. FOB destination: FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer’s destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer’s destination. In case of FOB destination, the goods in transit should be included in the seller inventory. Requirement 1: To calculate: The amount of sales revenue recognised in the month of December 2019.
Perpetual Inventory System: The perpetual inventory system records and updates the inventory after each and every transaction. The inventory balance is updated after each transaction and it is kept up to date at every time. FOB shipping point: FOB shipping point stands for Free On Board shipping point. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are shipped from the seller’s place. The goods in transit belong to the buyer and buyer bears the cost of transportation after the shipping point. In case of FOB shipping point, the goods in transit should be included in the buyer’s inventory. FOB destination: FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer’s destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer’s destination. In case of FOB destination, the goods in transit should be included in the seller inventory. Requirement 1: To calculate: The amount of sales revenue recognised in the month of December 2019.
Solution Summary: The author explains the perpetual inventory system, which records and updates the inventory after each and every transaction. The goods in transit belong to the buyer and buyer bears the cost of transportation.
The perpetual inventory system records and updates the inventory after each and every transaction. The inventory balance is updated after each transaction and it is kept up to date at every time.
FOB shipping point:
FOB shipping point stands for Free On Board shipping point. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are shipped from the seller’s place. The goods in transit belong to the buyer and buyer bears the cost of transportation after the shipping point. In case of FOB shipping point, the goods in transit should be included in the buyer’s inventory.
FOB destination:
FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer’s destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer’s destination. In case of FOB destination, the goods in transit should be included in the seller inventory.
Requirement 1:
To calculate:
The amount of sales revenue recognised in the month of December 2019.
To determine
Concept introduction:
Perpetual Inventory System:
The perpetual inventory system records and updates the inventory after each and every transaction. The inventory balance is updated after each transaction and it is kept up to date at every time.
FOB shipping point:
FOB shipping point stands for Free On Board shipping point. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are shipped from the seller’s place. The goods in transit belong to the buyer and buyer bears the cost of transportation after the shipping point. In case of FOB shipping point, the goods in transit should be included in the buyer’s inventory.
FOB destination:
FOB destination stands for Free On Board destination. It is a term for selling the merchandise, under which the delivery of goods is completed when the goods are reached at buyer’s destination. The goods in transit belong to the seller and seller bears the cost of transportation till the buyer’s destination. In case of FOB destination, the goods in transit should be included in the seller inventory.
Requirement 2:
To indicate:
The effect of inclusion of all shipments in revenue on various accounts.
Find the rate of return on this investment for donne
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