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Homework answers / question archive / Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases

Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases

Accounting

Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 26 units for $25 each.

  

 Purchases on December 716 units @ $10.00 cost Purchases on December 1433 units @ $15.00 cost Purchases on December 2126 units @ $18.00 cost

QS 5-13 Perpetual: Inventory costing with specific identification LO P1

Required:

Monson sells 26 units for $25 each on December 15. Of the units sold, 13 are from the December 7 purchase and 13 are from the December 14 purchase. Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory when costs are assigned based on specific identification.

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Answer

So, Cost assigned to the December 31 ending inventory is $798.

Explanation

Date Activity Recepit Issue Balance            
                     
    Qty. Rate Amt. Qty. Rate Amt Qty. Rate Amt
                     
07-Dec Purchase 16 $10  $160        16 10 160
14-Dec Purchase 33 $15   $495         16 10 160
                33 15 495
15-Dec Sale       13 $10   $130   3 $10   $30  
          13 $15   $195   20 $15   $300  
21-Dec Purchase 26 $18   $468         3 $10   $30  
                20 $15   $300  
                26 $18   $468  
31-Dec Ending             49   $798