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On April 14, 2010, Mattingly Furniture bought 200 coffee tables at $100 each from Mississippi Pine Warehouse. Shipping terms are FOB destination. Total delivery charges are $1,000. Mattingly uses a perpetual inventory system.
-Mattingly's inventory account balance should be increased by what amount as a direct result of this purchase?

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On April 14, 2010, Mattingly Furniture bought 200 coffee tables at $100 each from Mississippi Pine Warehouse. Shipping terms are FOB destination. Total delivery charges are $1,000. Mattingly uses a perpetual inventory system.
-Mattingly's inventory account balance should be increased by what amount as a direct result of this purchase?

Quizplus · Accepted Answer

$20,000. The inventory account should be increased by the cost of the coffee tables ($100 each x 200 tables = $20,000). FOB destination means the seller pays for shipping, so the shipping cost does not increase the inventory account balance.

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