Question

1,300 units are in ending inventory at the end of the current period, 20 of which were damaged by water and cannot be sold. How many units should be in periodending inventory?

Answer 1

The period-ending inventory should account for the undamaged units, therefore subtract the 20 damaged units from the total of 1,300 units, leaving 1,280 units as the correct end-of-period inventory count.

Step-by-step explanation:

The student is dealing with a question from the subject of Business, specifically an inventory issue in accounting. Given that 1,300 units are in ending inventory, and 20 units have been damaged and cannot be sold, we need to determine the number of units that should be considered for the period-ending inventory.

Inventory valuation and management is a critical aspect of business, especially for product-centric businesses. The damaged inventory typically should not be counted as sellable or usable inventory. In this case, since we know that 20 out of the 1,300 units are damaged, we would subtract the 20 damaged units from the total to arrive at the count of inventory that can be sold or used.

Therefore, the calculation would be as follows: 1,300 units (total ending inventory) − 20 units (damaged) = 1,280 units (period-ending inventory). The number 1,280 units represents the undamaged inventory that should be included in the period-ending inventory count.