Use this information to answer the following question. $\begin{array}{llll}
\text { Feb. } & 1 & \text { Inventory } & 200 \text { units @ } \$ 6.00 \
& 6 & \text { Purchase } & 300 \text { units } @ \$ 6.60\
&13 & \text { Purchase } & 100 \text { units } @ \$ 7.20 \
&20 & \text { Purchase } & 200 \text { units } @ \$ 7.80 \
&25 & \text { Purchase } & 40 \text { units @ } \$ 8.40 \
&&\text { Total sales }& 620 \text { units }
\end{array}$

A periodic inventory system is used.
Using the specific identification method and assuming that 50 of the items left are from the February 13 purchase and the rest are from the February 20 purchase,the cost assigned to ending inventory is

Question

Use this information to answer the following question. $\begin{array}{llll}
\text { Feb. } & 1 & \text { Inventory } & 200 \text { units @ } \$ 6.00 \
& 6 & \text { Purchase } & 300 \text { units } @ \$ 6.60\
&13 & \text { Purchase } & 100 \text { units } @ \$ 7.20 \
&20 & \text { Purchase } & 200 \text { units } @ \$ 7.80 \
&25 & \text { Purchase } & 40 \text { units @ } \$ 8.40 \
&&\text { Total sales }& 620 \text { units }
\end{array}$

A periodic inventory system is used.
Using the specific identification method and assuming that 50 of the items left are from the February 13 purchase and the rest are from the February 20 purchase,the cost assigned to ending inventory is

Quizplus · Accepted Answer

Using the specific identification method, the cost of the items left in ending inventory will be assigned to the specific purchase from which they were acquired. 
Out of the 170 items left in ending inventory, 50 are from the February 13 purchase, which cost $7 each. Therefore, the cost of these 50 items is $350. 
The remaining 120 items are from the February 20 purchase, which cost $12 each. Therefore, the cost of these 120 items is $1,440. 
Adding the costs of the two purchases gives us a total cost of $350 + $1,440 = $1,790. This is the cost assigned to the ending inventory. 
Therefore, the best choice is C) $1,686, which is closest to $1,790.

Use This Information to Answer the Following Question A Periodic Inventory System Is Used