Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 76

Items Included in Inventory
PC Mall, Inc. , is a direct marketer of computer hardware, software, peripherals, and electronics. In a recent annual report, the company reported that its revenue is "recognized upon receipt of the product by the customer" and that its "inventories include goods-in-transit to customers."
Required:
1. Indicate whether PC Mall's sales terms are FOB shipping point or FOB destination.
2. Assume PC Mall sold inventory on account to eCOST.com on December 28, 2012, which was to be delivered January 3, 2013. The inventory cost PC Mall $25,000 and the selling price was $30,000. What amounts, if any, related to this transaction would be reported on PC Mall's balance sheet and income statement in 2012 In 2013
3. PC Mall placed inventory on consignment with one of its customers. Would this inventory have been reported on the balance sheet of PC Mall or its customer
4. Assume PC Mall purchased electronics on December 29, 2012, which were received on January 2, 2013. For these goods to be included in PC Mall's inventory on December 31, 2012, would the terms have been under FOB destination or FOB shipping point