INTERMEDIATE ACCOUNTING RMU 9TH EDITION
9th Edition
ISBN: 9781260998726
Author: SPICELAND
Publisher: MCG
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Chapter 8, Problem 8.3BE
To determine
F.O.B (Free On Board) Shipping Point: Under this system, the responsibility of the seller over the goods ends once the goods are out of the warehouse. The buyer takes the responsibility of the delivery of the goods to his/her location. The legal title of the goods is transferred from the seller to the buyer, once the goods are out of the seller’s warehouse, regardless to the goods reached at buyer’s location.
F.O.B Destination Point: Under this system, the seller is responsible for the transfer of the goods from the warehouse to the customer’s destination. The legal title of the goods is transferred from the seller to the buyer, once the goods are delivered at the buyer’s place.
To find: the shipments that should be included in K’s December 31 inventory.
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Problem #2
Effect of Freight Terms to Inventory
Transactions:
1. Jesus Armenta Supplies shipped merchandise to Lily Custodio Sales on Dec. 28,
2009, terms FOB destination. The merchandise arrives at Lily Custodio's on Jan. 4,
2010.
2. Divina Quezada shipped merchandise to Nancy Mulles on Dec. 25, 2009, FOB
destination. Nancy Mulles received the merchandise on Dec. 31, 2009.
3. Lamberto Reyes Bros. shipped merchandise to Liwayway Ables Company on Dec. 27,
2009, FOB shipping point. Liwayway Ables Company received the merchandise on
Jan. 3, 2010.
4. Felinita Barroga Company shipped merchandise to Nanette Virtudazo on Dec. 24,
2009, FOB shipping point. The merchandise arrived at Nanette Virtudazo's on Dec.
29, 2009.
Required:
For each of the above transactions, indicate which company should include the
inventory on its Dec. 31, 2009 balance sheet:
Problem #5
Purchases and Sales Transactions
During the month of April 2010, the Mary Paz Abad Company and the Nelson Palete
Supply Company entered into the following transactions.
Abad purchased merchandise on account from Palete, P243,000.
Terms: FOB shipping point; 3/10, n/30. Paid freight charges
amounting to P4,000.
Apr. 5
Abad purchased merchandise on account from Palete, P470,000.
Terms: FOB destination; 3/10, n/30. Freight charges amounted
to P7,000.
Abad returned P18,000 of merchandise to Palete from the Apr. 5
purchase.
10
Abad paid Palete the amount due on the Apr. 5 transaction less
returns and discounts.
11
Patete paid the transportation charges on the Apr. 7 shipment.
14
Abad paid Palete the amount due from the Apr. 7 transaction.
Abad purchased merchandise from Palete on account, P270,000.
Terms: 20% trade discount; FOB shipping point; 3/10, n/30.
21
Freight charges on the Apr. 21 transaction amounted to P3,000 and
were paid by Åbad.
25
26
Abad paid Palete the amount due…
Problem #5 Purchases and Sales Transactions During the month of April 2010, the Mary Paz Abad Company and the Nelson Palete Supply Company entered into the following transactions. Abad purchased merchandise on account from Palete, P243,000. Terms: FOB shipping point; 3/10, n/30. Paid freight charges amounting to P4,000. Apr. 5 Abad purchased merchandise on account from Palete, P470,000. Terms: FOB destination; 3/10, n/30. Freight charges amounted to P7,000. Abad returned P18,000 of merchandise to Palete from the Apr. 5 purchase. 10 Abad paid Palete the amount due on the Apr. 5 transaction less returns and discounts. 11 Abad paid the transportation charges on the Apr. 7 shipment. 14 Abad paid Palete the amount due from the Apr. 7 transaction. Abad purchased merchandise from Palete on account, P270,000. Terms: 20% trade discount; FOB shipping point; 3/10, n/30. 21 Freight charges on the Apr. 21 transaction amounted to P3,000 and were paid by Åbad. 25 26 Abad paid Palete the amount due on…
Chapter 8 Solutions
INTERMEDIATE ACCOUNTING RMU 9TH EDITION
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - The Bockner Company shipped merchandise to Laetner...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - Prob. 8.3BECh. 8 - Purchas e discounts; gross method LO83 On...Ch. 8 - Prob. 8.5BECh. 8 - Prob. 8.6BECh. 8 - Inventor y cost flow methods; perpetual system ...Ch. 8 - LIFO method LO84 Esquire Inc. uses the LIFO...Ch. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Ratio analysis LO87 Selected financial statement...Ch. 8 - Dollar-value LIFO LO88 At the beginning of 2018,...Ch. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Determining cost of goods sold; periodic inventory...Ch. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.6ECh. 8 - Goods in transit; consignment LO82 The December...Ch. 8 - Physical quantities and costs included in...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.11ECh. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Inventory cost flow methods; periodic system ...Ch. 8 - Inventory cost flow methods; perpetual system ...Ch. 8 - Comparison of FIFO and LIFO; periodic system ...Ch. 8 - Average cost method; periodic and perpetual...Ch. 8 - FIFO, LIFO, and average cost methods LO81, LO84...Ch. 8 - Supplemental LIFO disclosures; LIFO reserve; AEP...Ch. 8 - LIFO liquidation LO81, LO84, LO86 The Reuschel...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Mercury Company has only...Ch. 8 - Dollar-value LIFO LO88 Carswell Electronics...Ch. 8 - Concepts; terminology LO81 through LO85 Listed...Ch. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.2PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Supple mental LIFO disclosures; Caterpillar LO84,...Ch. 8 - LIFO liquidation LO84, LO86 Taylor Corporation...Ch. 8 - LIFO liquidation LO84, LO86 Cansela Corporation...Ch. 8 - Prob. 8.11PCh. 8 - Integrating problem; inventories and accounts...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Kingston Company uses the...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018,...Ch. 8 - Prob. 8.1BYPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Judgment Case 83 The specific identification...Ch. 8 - Prob. 8.4BYPCh. 8 - Prob. 8.5BYPCh. 8 - Judgment Case 86 Goods in transit LO82 At the end...Ch. 8 - Ethics Case 87 Profit manipulation LO84 In 2017...Ch. 8 - Real World Case 88 Effects of inventory valuation...Ch. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 8.11BYPCh. 8 - Prob. 8.CCTCCh. 8 - Prob. CCIFRS
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