The Slippery Slope Company manufactures only snow skis. In 2016 Slippery Slope manufactured 10,000 snow skis, but sold 12,000 snow skis. In 2016 Slippery Slope's change in inventory was ________ snow skis.
A) -8,000
B) -2,000
C) 2,000
D) 22,000

Question

Quizplus · Accepted Answer

The change in inventory can be calculated as follows: 
Change in inventory = Ending inventory - Beginning inventory 
In this case, we do not know the ending inventory, but we can calculate the beginning inventory as follows: 
Beginning inventory = 10,000 
Since Slippery Slope sold 12,000 snow skis, we know that the ending inventory must be less than 10,000. Therefore, the change in inventory must be negative. 
Change in inventory = Ending inventory - Beginning inventory = Ending inventory - 10,000 
Since the change in inventory is negative, we can eliminate choices C and D. 
To determine the exact amount of the change in inventory, we would need to know the ending inventory. However, we can determine the minimum amount of the change in inventory by assuming that Slippery Slope sold all of the skis manufactured in 2016 and did not have any additional snow skis from previous periods. 
If Slippery Slope sold all of the 10,000 snow skis that they manufactured in 2016, then their ending inventory would be negative 2,000 (-2,000) snow skis. Therefore, the minimum change in inventory would be: 
Change in inventory = Ending inventory - Beginning inventory = (-2,000) - 10,000 = -12,000 
So, the best choice is B, which is the closest to the minimum change in inventory that we calculated.

The Slippery Slope Company Manufactures Only Snow Skis