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On November​ 30, Janoch's Dog Kennel purchased $ 600 of merchandise on account from the Ganster Company. The goods were shipped F.O.B. shipping point. The freight charge of $ 100 was paid by Ganster Company and added to the invoice. The amount to record in the Purchases account​ is:

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jepessoa

Answer:

$700

Explanation:

The journal entry to record the purchase should be:

November 30, Merchandise purchased from Ganster Company

  • Dr Merchandise Inventory account 700
  • Cr Cash account 700

Since the freight charge was added to the invoice, then the total invoice will = $600 + $100 = $700

When a company purchases FOB shipping point, the title of the goods passes at the seller's shipping dock. Therefore the merchandise inventory must increase once the goods have left the seller's shipping dock.

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