Philips Corp.is unsure how to record the following transactions:
• $60,000 of goods shipped F.O.B shipping point on December 28,2018.
• $50,000 of goods shipped F.O.B.destination point on December 31,2018.
What amount of sales related to these two transactions should Philips Corp.record in fiscal 2018?
A)$0
B)$50,000
C)$60,000
D)$110,000

Question

Quizplus · Accepted Answer

Goods shipped F.O.B shipping point are the responsibility of the buyer once they leave the seller's premises. Therefore, the sale of $60,000 should be recorded in fiscal 2018 since the responsibility was passed on to the buyer on December 28, 2018.

Goods shipped F.O.B destination point are still the responsibility of the seller until they reach the buyer's premises. Therefore, the sale of $50,000 should not be recorded in fiscal 2018 since the responsibility was not passed on to the buyer until after the end of the fiscal year, on December 31, 2018.