Question

Carlson Auto Dealers Inc. sells a handmade automobile as its only product. Each automobile is identical; however, they can be distinguished by their unique ID number. At the beginning of 2021, Carlson had three cars in inventory, as follows:
Car ID Cost
203 $78,000
207 78,000
210 81,000

During 2021, each of the three autos sold for $108,000. Additional purchases (listed in chronological order) and sales for the year were as follows:

Car ID Cost Selling Price
211 $78,000 $108,000
212 78,000 111,000
213 79,500 not sold
214 81,000 114,000
215 84,000 118,500
216 82,500 not sold
217 87,000 123,000
218 84,300 124,500
219 90,000 not sold

Required:
Calculate 2021 ending inventory and cost of goods sold assuming the company uses the specific identification inventory method.

Answer 1

The Carlson Auto Dealers Inc.'s 2021 cost of ending inventory is $252,000 based on the specific identification inventory method.

2. The Carlson Auto Dealers Inc.'s Cost of Goods Sold for 2021 is $729,300 using the specific identification inventory method.

Data and Calculations:

Beginning Inventory of cars:

Car ID        Cost

203         $78,000

207           78,000

210            81,000

Total = $237,000

Cost of Ending Inventory:

Car ID        Cost      

213          79,500      not sold

216          82,500       not sold

219         90,000       not sold

Total  $252,000

Cost of Goods Sold:

Car ID                  Cost    

203                    $78,000

207                      78,000

210                       81,000

211                       78,000

212                      78,000  

214                      81,000

215                     84,000  

217                     87,000

218                    84,300

Total Cost = $729,300

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