Question

Westcom corporation's goods in transit at december 31 include (1) sales made fob destination, (2) sales made fob shipping point, (3) purchases made fob destination, and (4) purchases made fob shipping point. which items should be included in westcom's inventory at december 31?

a. (2) and (3)
b. (1) and (4)
c. (1) and (3)
d. (2) and (4)

Answer 1

Westcom Corporation should include sales made fob destination (1) and purchases made fob shipping point (4) in their inventory at December 31.

Step-by-step explanation:

Westcom Corporation's goods in transit at December 31 that should be included in inventory are sales made fob destination (1) and purchases made fob shipping point (4). Sales made fob destination means that the seller is responsible for the goods until they reach the buyer's location. Therefore, these goods are still owned by Westcom Corporation and should be included in their inventory. Similarly, purchases made fob shipping point means that the buyer assumes ownership of the goods when they are shipped. These goods have been purchased by Westcom Corporation but have not yet been received, so they should also be included in inventory.