Simple Inc. had sales of $1,500,000, including: •$30,000 of goods sold that were on consignment from an unrelated company on December 28, 2021
•$10,000 of goods shipped F.O.B shipping point on December 28, 2021.
•$20,000 of goods shipped F.O.B. destination point on December 31, 2021.
On its income statement, what amount of net sales should Simple Inc. record for 2021?
A)$1,440,000
B)$1,470,000
C)$1,480,000
D)$1,490,000

Question

Quizplus · Accepted Answer

The consignment sales of $30,000 should be excluded from Simple Inc.'s sales, as they are not owned by the company. The $10,000 of goods shipped F.O.B shipping point should be included as they are considered sold when shipped. The $20,000 of goods shipped F.O.B. destination should not be included as they are not considered sold until they reach the destination. Therefore, net sales = $1,500,000 - $30,000 - $20,000 = $1,480,000.