Question

Beginning inventory, purchases, and sales for an inventory item are as follows:

Answer 1

Answer:

Option (D) is correct.

Explanation:

Sale from beginning inventory = (Beginning inventory - sales units) × selling price per unit

                                                  = (24 - 17) × $15

                                                  = 7 × $15

                                                  = $105

Sale from September 17th purchase:

= (Beginning inventory - sales units of Sept 5 and Sept 30) × $20

= (24 - 17 - 8) × $20

= 1 × $20

= $20

Therefore,

Cost of good sold on Sept 30 = Sale from beginning inventory  + Sale from September 17th purchase

                                                  = $105 +  $20

                                                  = $125

Ending inventory:

= ( Beginning inventory - Sept 5 Sale + Sept 17 Purchase - Sept 30 Sale) × per unit purchasing price

= (24 - 17 + 10 -8) × $20

= 9 units × $20

= $180