2.7k views
0 votes
For each of the following cases determine the ending balance in the inventory account. (Hint: First, determine the total cost of inventory available for sale. Next, subtract the cost of the inventory sold to arrive at the ending balance.) a. Jill’s Dress Shop had a beginning balance in its inventory account of $52,000. During the accounting period Jill’s purchased $111,000 of inventory, returned $7,400 of inventory, and obtained $990 of purchases discounts. Jill’s incurred $1,480 of transportation-in cost and $840 of transportation-out cost. Salaries of sales personnel amounted to $43,000. Administrative expenses amounted to $47,600. Cost of goods sold amounted to $106,300. b. Ken’s Bait Shop had a beginning balance in its inventory account of $12,800. During the accounting period Ken’s purchased $56,100 of inventory, obtained $1,680 of purchases allowances, and received $600 of purchases discounts. Sales discounts amounted to $880. Ken’s incurred $1,380 of transportation-in cost and $500 of transportation-out cost. Selling and administrative cost amounted to $14,700. Cost of goods sold amounted to $38,700.

User Gallop
by
5.8k points

1 Answer

5 votes

Answer:

a) 49,790‬

b) 29,300

Step-by-step explanation:

We must understand that we should capitalize all the cost needed to get the inventory ready to sale.

the return and discount decrease the inventory

the freight-out are cost for selling goods not purchase.

Inventory

Debit Credit

52,000

111,000

7,400

990

1,480

156,090‬

106,300

49,790‬

Inventory

Debit Credit

12,800

56,100

1,680

600

1,380

68,000

38,700

29,300

User Didito
by
5.6k points