Final answer:
The journal entry for paying cash to FedEx for shipping costs of inventory includes a debit to Inventory or Transportation-in Expense and a credit to Cash. Debiting Inventory is common when shipping costs are considered part of the cost of inventory, while Transportation-in Expense is used if the cost is recognized as an expense immediately.
Step-by-step explanation:
The journal entry to record the payment of cash to FedEx for shipping costs for inventory purchased FOB shipping point typically includes a debit to Inventory or Transportation-in Expense, depending on when the company chooses to recognize the expense, and a credit to Cash because the company is paying out cash. A debit to Inventory is used when the company considers shipping costs as part of the inventory cost that will later become part of cost of goods sold upon sale of the goods. Alternatively, a debit to Transportation-in Expense is used when the company immediately recognizes the shipping expense in the current period. There's no effect on Accounts Payable because this typically reflects amounts owed to vendors for inventory purchases, not shipping costs. Also, the payment of cash would not directly affect stockholders' equity, except indirectly through profits and losses over time. Additionally, Cost of Goods Sold would not be debited at the time of payment for shipping as it relates to inventory sold, not inventory shipped.