91影视

There are two shipping terms namely FOB destination and FOB shipping point. Under f.o.b. destination the title of the goods remains with the supplier or seller unless the goods are delivered to the buyer. Whereas in f.o.b. shipping point, the supplier or seller transfers the title as soon as the goods are shipped.

As the purchases were made on the terms f.o.b. shipping point, the Stallman Company has received the title of the goods. Thus it should report this inventory on Dec 31.

The ending inventory would increase by $25,000.

As the selling term was f.o.b. destination, the Stallman Company possesses the title of the goods unless the goods are received by the Alvarez company. Thus this inventory should be included in the closing inventory.

The ending inventory would increase by $22,000.

$$\begin{gathered} \mathbf{Value}\mathbf{}\mathbf{of}\mathbf{}\mathbf{}\mathbf{ending}\mathbf{}\mathbf{inventory}\mathbf{(}\mathbf{as}\mathbf{}\mathbf{on}\mathbf{}\mathbf{Dec}\mathbf{31}\mathbf{)}\mathbf{=}\mathbf{Inventory}\mathbf{}\mathbf{on}\mathbf{}\mathbf{hand}\mathbf{+}\mathbf{FOB}\mathbf{}\mathbf{shipping}\mathbf{}\mathbf{point}\mathbf{}\mathbf{purchase}\mathbf{+}\mathbf{FOB}\mathbf{}\mathbf{destination}\mathbf{}\mathbf{sales} \\ \mathbf{=}\mathbf{\$}\mathbf{200}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{25}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{22}\mathbf{,}\mathbf{000} \\ \mathbf{=}\mathbf{\$}\mathbf{247}\mathbf{,}\mathbf{000} \end{gathered}$$