Reference no: EM132488737

Question 1: What does FOB mean?

Question 2: What are the two types of FOB, and who pays under each method?

Question 3: What account does the seller charge (debit) when she pays her own freight charges?

Question 4: What account does the buyer charge (debit) when she pays her own freight charges?

Question 5: What account does the seller charge (debit) when she pays the buyer's freight?

Part 1

Use the information below to determine the number of units in ending inventory and the ending inventory value using the perpetual inventory system for FIFO.

($)

Number Per

Date             Transaction of units                           unit

Apr. 3                    Inventory 30                       800

8                         Purchase 60                           820

11                            Sale 40                                  -

30                            Sale 30                                 -

May 8                      Purchase 60                         850

10                             Sale 20                                -

19                               Sale 15                               -

28                              Purchase 80                         900

Part 2:

Question 6: There are 10 units in ending inventory compute the value of the ending inventory using the periodic inventory method. Compute the answer using FIFO, LIFO and the average cost methods. (round your answer to the nearest whole number)

Price Cost

Number Per Per

Date         Transaction of units unit Purchase

Apr. 3            Inventory 2 10 20

8                  Purchase 2 15 30

11                Purchase 3 20 60

30               Purchase 2 25 50

May 8          Purchase 3 25 75

10               Purchase 3 30 90

19             Purchase 3 30 90

28          Purchase 3 35 105

June 5    Purchase 3 40 120

16            Purchase 4 40 160

21            Purchase 4 45 180

28           Purchase 3 50 150