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