Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale. Consigned goods: Consigned goods are those goods which are given further to agents to perform the function of sale. The risk and ownership of the consigned goods always remain in the hands of the company which is the consignor of those goods, till goods are unsold. Free on board (FOB): It refers to the term of sales, which states who will be liable for the risk related to the damage of goods in transit. This liability can be of seller or buyer, depends upon the condition. The types of free board are: Free on board (FOB) shipping point Free on board (FOB) destination FOB shipping point: In free on board (FOB) shipping point, ownership of goods transferred from seller to buyer with the transfer of goods to the goods carrier. FOB destination: In free on board (FOB) destination, the ownership and risk related to goods to be sold will remain with the seller till the date on which consignment will be actually received by the buyer. To determine: The amount for each given transaction which should be included in the calculation of ending inventory.

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 6.1AP

To determine

Inventory: It refers to the total stock of such goods or items which are held by the business organizations with the purpose of sale.

Consigned goods: Consigned goods are those goods which are given further to agents to perform the function of sale. The risk and ownership of the consigned goods always remain in the hands of the company which is the consignor of those goods, till goods are unsold.

Free on board (FOB): It refers to the term of sales, which states who will be liable for the risk related to the damage of goods in transit. This liability can be of seller or buyer, depends upon the condition.

The types of free board are:

Free on board (FOB) shipping point

Free on board (FOB) destination

FOB shipping point: In free on board (FOB) shipping point, ownership of goods transferred from seller to buyer with the transfer of goods to the goods carrier.

FOB destination: In free on board (FOB) destination, the ownership and risk related to goods to be sold will remain with the seller till the date on which consignment will be actually received by the buyer.

To determine: The amount for each given transaction which should be included in the calculation of ending inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Please provide solution this financial accounting question not use chatgpt

Berkley Shoe Company's work-in-process inventory on July 1 has a balance of $25,600, representing Job No. 314. During July, $54,800 of direct materials were requisitioned for Job No. 314, and $37,200 of direct labor cost was incurred on Job No. 314. Manufacturing overhead is allocated at 130% of direct labor cost. Actual manufacturing overhead costs incurred in July amounted to $46,200. No new jobs were started during July. Job No. 314 is completed on July 30. Is manufacturing overhead overallocated or under-allocated for the month of July and by how much?help

The profit margin would be