Question

During the year, Wright Company sells 500 remote-control airplanes for $120 each. The company has the following inventory purchase transactions for the year. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 40 $ 68 $ 2,720 May. 5 Purchase 270 71 19,170 Nov. 3 Purchase 220 76 16,720 530 $ 38,610 Calculate ending inventory and cost of goods sold for the year, assuming the company uses specific identification. Actual sales by the company include its entire beginning inventory, 250 units of inventory from the May 5 purchase, and 210 units from the November 3 purchase.

Answer 1

Answer:

Wright Company

Cost of goods sold = $36,430

Ending inventory = $2,180

Explanation:

a) Data and Calculations:

Date   Transaction            Number of Units    Unit Cost     Total Cost

Jan. 1   Beginning inventory           40                   $ 68          $ 2,720

May. 5 Purchase                          270                        71             19,170

Nov. 3 Purchase                          220                       76            16,720

Total available for sale               530                                     $ 38,610

Specific identification of Sales of 500 units:

Cost of goods sold:

Jan. 1   Beginning inventory           40                   $ 68          $ 2,720

May. 5 Purchase                          250                       71             17,750

Nov. 3 Purchase                           210                       76            15,960

Total                                             500                                    $36,430

Cost of goods sold = $36,430

Ending inventory:

May. 5 Purchase                          20                       71         $1,420

Nov. 3 Purchase                           10                       76             760

Total                                             30                                   $2,180

Ending inventory = $2,180