Philips Corp. is unsure how to record the following transactions: •$60,000 of goods shipped F.O.B shipping point on December 28, 2012.
•$50,000 of goods shipped F.O.B. destination point on December 31, 2012.
What amount of sales related to these two transactions should Philips Corp. record in fiscal 2012?
A)$0
B)$50,000
C)$60,000
D)$110,000

Question

Quizplus · Accepted Answer

The goods shipped F.O.B shipping point on December 28, 2012 should be recorded as sales in fiscal 2012 since the transfer of ownership and responsibility for the goods passed to the buyer upon shipment. However, the goods shipped F.O.B destination point on December 31, 2012 should not be recorded in fiscal 2012 since the transfer of ownership and responsibility for the goods did not occur until they reached their destination, even if they were shipped in 2012. Therefore, only $60,000 of sales should be recorded in fiscal 2012.