Question

Walberg Associates, antique dealers, purchased the contents of an estate for 575,000. Terms of the purchase were FOBshipping point, and the cost of transporting the goods to Walberg Associates's warehouse was $2.400. Walberg Associatesinsured the shipment at a cost of 5300. Prior to putting the goods up for sale. they cleaned and refurbished them at a costof $980. Determine the cost of the inventory acquired from the estate.

Answer 1

Answer:$583,680

Step-by-step explanation:

FOB shipping, means the goods are free to the buyer up to the shipping point at this point the risks and rewards of ownership has been transferred to the buyer . He takes care of transportation, insurance and other costs incurred from that point till the goods gets to it's warehouse.

In the above scenario the cost to be beared by Walberg associates includes cost of goods of $575,000 plus cost of transportation of $2400, plus insurance cost of $5300, and the refurbishing cost of $980 all total $583,680.