Alphabet Company,which uses the periodic inventory method,buys different letters for resale.It buys A through G in January at $4 per letter.It buys H through L at $6 per letter.It buys M through R in March at $7 per letter.It sells A,D,E,H,J and N in April. If the 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

COGS = $4 + $4 + $4 + $6 + $6 + $7 = $31
P = 7 @ $4 + 5 @ $6 + 6 @ $7 = $100
Beg)Inv.+ P = GAFS - End Inv = COGS
0 + $100 = 100 - EI = 31
Ending Inventory = $69.

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