A retailer maintains a book (perpetual)inventory system in which all figures are kept at cost values.The beginning-of-month inventory as of December 1 is $100,000;the purchases in December equal $80,000;and December's sales (at cost)equal $63,000.The beginning of month inventory for January 1 then equals _____.

Question

Quizplus · Accepted Answer

Using the perpetual inventory system, we can calculate the ending inventory for December as follows:

Beginning inventory (December 1) = $100,000
Purchases in December = $80,000
Cost of goods available for sale = $180,000

Cost of goods sold = $63,000
Ending inventory = Cost of goods available for sale - Cost of goods sold
Ending inventory = $180,000 - $63,000
Ending inventory = $117,000

Therefore, the beginning inventory for January 1 is equal to the ending inventory for December, which is $117,000. Hence, the correct answer is B.

A Retailer Maintains a Book (Perpetual)inventory System in Which All