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At year-end, Barr Co. had shipped $12,500 of merchandise FOB destination to Lee Co. Which company should include the $12,500 of merchandise in transit as part of its year-end inventory?

Sagot :

Answer: Barr Co.

Explanation:

Merchandise in transit refers to the merchandise which has already left the seller's shipping dock but hasn't gotten to the buyer's shipping dock.

In this case, since Barr Co. shipped the $12,500 of merchandise FOB destination to Lee Co and the goods have gotten to Lee Co, the company that they should include the $12,500 of merchandise in transit as part of its year-end inventory is Barr Co.

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