Shubart Apparel Company purchased 1,000 shirts from Blue Parrot,FOB shipping point.Each shirt had an invoice cost of $18,which includes $1 of tariff paid to import the shirts from Belize.Shubart also paid FedEx $2,000 to have the shirts shipped to its warehouse in Florida,and another $500 to insure the shirts while they were in transit.
Required:
a.Determine the inventory cost that Shubart should record.
b.Explain when the costs described above will become expenses.

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The Answer of Shubart Apparel Company purchased 1,000 shirts from Blue Parrot,FOB shipping point.Each shirt had an invoice cost of $18,which includes $1 of tariff paid to import the shirts from Belize.Shubart also paid FedEx $2,000 to have the shirts shipped to its warehouse in Florida,and another $500 to insure the shirts while they were in transit.
Required:
a.Determine the inventory cost that Shubart should record.
b.Explain when the costs described above will become expenses.

Shubart Apparel Company Purchased 1,000 Shirts from Blue Parrot,FOB Shipping