Assuming CBC uses the gross method to record purchases,ending inventory would be:
A)$6,480.
B)$15,400.
C)$15,480.
D)$21,000.

Question

Quizplus · Accepted Answer

Since the gross method includes freight-in as part of the cost of inventory, the cost of goods available for sale is $27,880 ($22,000 + $4,480). We subtract the cost of goods sold ($12,400) from the cost of goods available for sale to find the cost of ending inventory.

$27,880 - $12,400 = $15,480

Therefore, the answer is choice C, $15,480.

Assuming CBC Uses the Gross Method to Record Purchases,ending Inventory