Question

breyer company bought inventory fob shipping point from cellar company for $4,000 cash, including shipping charges. on december 31, the last day of the accounting year, the goods were on a truck owned by common carrier company, and not expected to arrive until january 3. which company should include these goods in its december 31 inventory?

Answer 1

If Breyer company bought inventory fob shipping point from cellar company for $4,000 cash, including shipping charges. The company that should include these goods in its December 31 inventory is: Breyer should include the 4,000 in its inventory

Breyer company should include the amount of $4,000  which is the amount paid in cash for purchasing or buying from Cellar company in its December 31 inventory.

Reason been that Breyer company has already paid for the goods including the cost of shipping the goods.

Even though the goods were not delivered to Breyer  before  December 31  but till January 3, Breyer has the right to include the amount of $4,000 in its inventory because the goods is no longer in the seller  who is Cellar company possession again and because the goods has been paid for .

Inconclusion if Breyer company bought inventory fob shipping point from cellar company for $4,000 cash, including shipping charges. The company that should include these goods in its December 31 inventory is: Breyer should include the 4,000 in its inventory.

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