Question

The company received an order on December 29 that was boxed and was sitting on the loading dock awaiting pick-up on December 31. The shipper picked up the goods on January 1 and delivered them on January 6. The shipping terms were FOB shipping point. The goods had a selling price of $37,050 and a cost of $26,520. The goods were not included in the count because they were sitting on the dock.

Answer 1

That was a mistake since those gods were part of the company's inventory. FOB shipping point refers to sales transactions where the title of the good is transferred once the goods leave the company's warehouse or shipping dock. In this case, the goods left the company on January 1, so they should have been included in the company's inventory of December 31, and the sales should be recognized during January, not December.

Step-by-step explanation: