Giant-Mart purchased a big shipment of shoes from Right Balance, Inc. on credit near the end of its accounting period. Right Balance shipped the shoes in January and Giant-Mart received the shoes in February. Assume that GiantMart's accounting period ends on January 31, while Right Balance's accounting period ends on May 31.
REQUIRED: If the shoes are shipped FOB destination, who will pay the freight costs? If the shoes are shipped FOB shipping point, who will pay the freight costs?

Question

Giant-Mart purchased a big shipment of shoes from Right Balance, Inc. on credit near the end of its accounting period. Right Balance shipped the shoes in January and Giant-Mart received the shoes in February. Assume that Giant­Mart's accounting period ends on January 31, while Right Balance's accounting period ends on May 31.
REQUIRED: If the shoes are shipped FOB destination, who will pay the freight costs? If the shoes are shipped FOB shipping point, who will pay the freight costs?

Quizplus · Accepted Answer

The Answer of Giant-Mart purchased a big shipment of shoes from Right Balance, Inc. on credit near the end of its accounting period. Right Balance shipped the shoes in January and Giant-Mart received the shoes in February. Assume that Giant­Mart's accounting period ends on January 31, while Right Balance's accounting period ends on May 31.
REQUIRED: If the shoes are shipped FOB destination, who will pay the freight costs? If the shoes are shipped FOB shipping point, who will pay the freight costs?

Giant-Mart Purchased a Big Shipment of Shoes from Right Balance