Alphabet Company,which uses the periodic inventory method,purchases different letters for resale.Alphabet had no beginning inventory.It purchased A thru G in January at $4 per letter.In February,it purchased H thru L at $6 per letter.It purchased M thru R in March at $7 per letter.It sold A,D,E,H,J and N in October.There were no additional purchases or sales during the remainder of the year. If Alphabet Company uses the specific identification method,what is the cost of its ending inventory?
A)$31
B)$69
C)$76
D)$100

Question

Quizplus · Accepted Answer

Of the 7 letters (A through G)purchased in January @ $4 per letter,4 are left
Of the 5 letters (H through L)purchased in February @ $6 per letter,3 are left
Of the 6 letters (M through R)purchased in March @ $7 per letter,5 are left
Ending inventory = (4 letters × $4)+ (3 letters × $6)+ (5 letters × $7)= $69

Alphabet Company,which Uses the Periodic Inventory Method,purchases Different Letters for Resale.Alphabet