Question

During the year, Wright Company sells 330 remote-control airplanes for $110 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 60 $73 $ 4,380
May 5 Purchase 205 76 15,580
Nov. 3 Purchase 110 81 8,910
375 $ 28,870
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, 185 units of inventory from the May 5 purchase, and 85 units from the November 3 purchase.

Answer 1

Answer:

Ending Stock  =  20+25 = 45 and  Cost of goods sold            =   25325

Explanation:

Date  units cost             Total Cost      Sold Units     Ending Stock

1-Jan 60            73           4380                 60                   -

5-May 205            76         15580               185                 20

3-Nov 110            81                  8910                  85                 25

A) using specific identification inventory method

Ending Stock  =  20+25 = 45

Cost of goods sold

Date  

1-Jan                    =        60*73   =   4380

5-May                  =        185*76 =   14060

3-Nov                  =         85*81  =    6885

     Cost of goods sold            =   25325