What was the cost of the shipping paid by Eisler Company for the consigned freezers?

In transactions involving consigned goods, the cost of shipping can significantly affect the overall expenses related to those goods. In this scenario, the shipping cost paid by Eisler Company for the consigned freezers is 840.

When goods are consigned, the party that retains ownership (the consignor) typically does not recognize revenue until the goods are sold by the consignee. However, the costs directly associated with getting the goods to the consignee—such as shipping—are relevant for accounting purposes. These shipping costs should be recorded as part of the inventory or cost of goods sold once the freezers are sold.

The shipping cost of 840 reflects the actual expense incurred to transport the freezers, thus providing an accurate representation of the financial outlay associated with getting the inventory ready for sale. This figure is essential for financial reporting and helps in calculating the profit once the goods are sold.

Understanding the shipping costs in a consignment arrangement ensures that all parties have clarity on their expenditures, which aids in financial decision-making and reporting.