Question

Office Supply Corporation purchased 16,000 rolls of paper towels in October. They were able to sell 12,500 rolls of paper towels. Calculate the total ending inventory of paper towels assuming each roll cost $1.79

A.$3,500.00
B.$2,500.00
C.$7,000.00
D.$6,265.00

Answer 1

The answer is D ❤️

Explanation:

Answer 2

D. $6,265.00

Explanation:

It is important to take into account that the inventory refers to the rolls that are still in the company in terms of money; in other words, the rolls that were not sold.

With that in mind, from the total rolls of paper towels (16,000) we have to subtract those which were sold (12,500). The difference refers to the total rolls which were not sold and conforms the ending inventory.

`unsold\, rolls =total\, rolls - sold\, rolls`

`unsold\, rolls =16,000 - 12,500 = 3,500`

It means that 3,500 rolls were not sold.

Ending Inventory

Now, the cost of those 3,500 rolls is calculated by multiplying those number of rolls by the price of each one.

`inventory=(unsold\, rolls)* (unit\, cost)`

`inventory=(3500)* (1.79)=6265`

Thus, the total ending inventory of paper towels is $6,265.00