PC Mall, Inc., is a direct marketer of computer hardware, software, peripherals, and electronics.In a recent annual report, the company reported that its revenue is “recognized upon receipt of theproduct by the customer.”Required:1. Indicate whether PC Mall’s sales terms are FOB shipping point or FOB destination.2. Assume PC Mall sold inventory on account to eCOST.com on December 28 that was to bedelivered January 3. The inventory cost PC Mall $25,000 and the selling price was $30,000.What amounts, if any, related to this transaction would be reported on PC Mall’s balance sheetand income statement in December? In January?3. Assume PC Mall purchased electronics on December 29 that were shipped that day andreceived on January 2. For these goods to be included in PC Mall’s inventory on December 31,would the terms have been FOB destination or FOB shipping point?
PC Mall, Inc., is a direct marketer of computer hardware, software, peripherals, and electronics.
In a recent annual report, the company reported that its revenue is “recognized upon receipt of the
product by the customer.”
Required:
1. Indicate whether PC Mall’s sales terms are FOB shipping point or FOB destination.
2. Assume PC Mall sold inventory on account to eCOST.com on December 28 that was to be
delivered January 3. The inventory cost PC Mall $25,000 and the selling price was $30,000.
What amounts, if any, related to this transaction would be reported on PC Mall’s balance sheet
and income statement in December? In January?
3. Assume PC Mall purchased electronics on December 29 that were shipped that day and
received on January 2. For these goods to be included in PC Mall’s inventory on December 31,
would the terms have been FOB destination or FOB shipping point?
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