Answer with explanation:

1. The correct answer is Barr Co.
The shipping term is that, FOB destination. That means, the seller should carry the value of the inventory in transit until it reaches the destination port of the buyer. Here, Barr Co. had shipped $12,500 merchandise on FOB destination basis to Lee Co. In this situation, Barr Co. is the seller and Lee Co. is the buyer. Therefore, Barr Co. should include the $12,500 of merchandise in transit as part of its year -end inventory.

2.
a. Parris Co. is the consignor. A consignor is a person who is sending the goods through land, air or water facility. The consignor is the shipper or sender of the goods.

b. Harlow Co. is the consignee. A consignee is a person who sells the goods on behalf of the consignor. The consignee acts as a middlemen between the producer and the buyer or final user. He is the receiver of the goods on consignment.

c. Parris Co. should include the unsold goods as part of its inventory. Because the consignor should keep the title of the inventory until it is sold out by the consignee. Parris Co. is the still the owner of the unsold inventory.