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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. 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.
Expert Solution
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 |
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