Netta Shutters has the following inventory information. A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand.Assume a periodic inventory system is used.Assuming that the specific identification method is used and that ending inventory consists of 20 units from each of the three purchases and 30 units from the November 1 inventory, cost of goods sold is

Question

Netta Shutters has the following inventory information.  A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand.Assume a periodic inventory system is used.Assuming that the specific identification method is used and that ending inventory consists of 20 units from each of the three purchases and 30 units from the November 1 inventory, cost of goods sold is

Quizplus · Accepted Answer

Since the specific identification method is used, we can directly calculate the cost of goods sold by adding up the cost of each unit sold. The 60 units sold consist of 10 units from each of the three purchases and 30 units from the November 1 inventory.

Cost of goods sold = (10 x $8) + (10 x $9) + (10 x $10) + (30 x $7) = $80 + $90 + $100 + $210 = $480

Therefore, the cost of goods sold is $480. Subtracting this from the total cost of inventory ($2,262) gives us the ending inventory cost of $1,782.

Netta Shutters Has the Following Inventory Information