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    lakers24's Avatar
    lakers24 Posts: 1, Reputation: 1
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    #1

    Dec 6, 2008, 07:43 PM
    Journal entries
    Can u plase help me with the journal entries for this?

    Wilcox enterpises Inc. received goods costing 37000 on Jan 2, 2008 that were shipped FOB destination on Dec 29,2007. The shipment was a rush order that was supposed to arrive dec 31, 2007. This credit purchase was included in the ending inventory. The company uses a perpetual inventory system.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Dec 9, 2008, 10:18 AM

    This Transaction should not be recorded as inventory until it is received because of FOB Destination. FOB Destination means that the title of the goods does not transfer to the buyer until the goods are received by the buyer.

    Therefore your ending inventory needs to be adjusted so that this purchase does not appear in your ending inventory.
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