Question:
Kelly Corporation shipped goods to a customer f.o.b. destination on December 29, 2013. The goods
arrived at the customer’s location in January. In addition, one of Kelly’s major suppliers shipped goods to
Kelly f.o.b. shipping point on December 30. The merchandise arrived at Kelly’s location in January.
Which shipments should be included in Kelly’s December 31 inventory?
Answer:
Both shipments should be included in inventory. The goods shipped to a customer f.o.b. destination did
not arrive at the customer’s location until after the fiscal year-end. They belong to Kelly until they arrive
at the customer’s location. Title to the goods shipped from a supplier to Kelly on December 30, f.o.b.
shipping point, changed hands on December 30.
Kelly Corporation shipped goods to a customer f.o.b. destination on December 29, 2013. The goods
arrived at the customer’s location in January. In addition, one of Kelly’s major suppliers shipped goods to
Kelly f.o.b. shipping point on December 30. The merchandise arrived at Kelly’s location in January.
Which shipments should be included in Kelly’s December 31 inventory?
Answer:
Both shipments should be included in inventory. The goods shipped to a customer f.o.b. destination did
not arrive at the customer’s location until after the fiscal year-end. They belong to Kelly until they arrive
at the customer’s location. Title to the goods shipped from a supplier to Kelly on December 30, f.o.b.
shipping point, changed hands on December 30.
