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Alphabet Company, which uses the periodic inventory method, purchases different letters for resale. Alphabet had no beginning inventory. It purchased A thru G in January at $5.50 per letter. In February, it purchased H thru L at $7.50 per letter. It purchased M thru R in March at $8.50 per letter. It sold A, D, E, H, J and N in October. There were no additional purchases or sales during the remainder of the year. If Alphabet Company uses the specific identification method, what is the cost of its ending inventory?

Respuesta :

Answer:

The cost of ending inventory is $87

Explanation:

If A,D,E,H,J and N were sold in October ,the following are still in inventory at end of October:B,C,F,G,I,K,L,M,O,P,Q,R

B=$5.50

C=$5.50

F=$5.50

G=$5.50

I=$7.50

K=$7.50

L=$7.50

M=$8.50

O=$8.50

P=$8.50

Q=$8.50

R=$8.50

total of the above costs is $87

The cost of ending inventory is $87

The cost of the ending inventory is 87.

Calculation of the cost of the ending inventory:

Since

Inventory from A to G = 7 * 5.5 = 38.5

Inventory from H to L = 7.5 * 5 = 37.5

Inventory from M to R = 8.5 * 6 = 51.0

Total initial inventory = 38.5 + 37.5 + 51 = 127

so,

Sales of A, D, E, H, J and N is

= 3 * 5.5 + 7.5 * 2 + 8.5

= 40

Therefore,

Cost of ending inventory should be

= 127 - 40

= 87

hence, The cost of the ending inventory is 87.

Learn more about inventory here: https://brainly.com/question/24315664

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