Question

Required information Use the following information for the Quick Study below. (Algo) (11-14) [The following information applies to the questions displayed below] Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15 units for $27 each. Purchases on December 7 purchases on Decenber 14 Purchases on Dece-ber 21​10 unita o $13.00 cont 20 units e $19.00 cost 13 unita e $21.00 cost ​ QS 5-14 (Algo) Perpetual: Inventory costing with specific identification LO P1 Of the units sold, 8 are from the December 7 purchase and 7 are from the December 14 purchase. Determine the costs assigned to ending inventory when costs are assigned based on specific identification.

Answer 1

The costs assigned to ending inventory using specific identification are calculated as follows: For the 8 units sold from the December 7 purchase, the cost assigned to the ending inventory is $104 (8 units × $13). For the 7 units sold from the December 14 purchase, the cost assigned to the ending inventory is $133 (7 units × $19). The total cost assigned to the ending inventory from these specific identification sales is $237.

Step-by-step explanation:

In specific identification inventory costing, the costs assigned to ending inventory are determined by directly attributing the specific costs of the units sold. In this scenario, 8 units out of the 15 units sold originate from the December 7 purchase at a cost of $13 per unit. The cost assigned to the ending inventory for these 8 units is $104 (8 units × $13).

Additionally, 7 units of the total 15 units sold are from the December 14 purchase, priced at $19 per unit. The cost allocated to the ending inventory for these 7 units is $133 (7 units × $19).

When summing up the costs assigned to ending inventory based on specific identification for both purchases ($104 from December 7 purchase and $133 from December 14 purchase), the total cost assigned to the ending inventory amounts to $237. This represents the specific costs attributed to the units remaining in inventory after the sale based on the specific identification of the units sold from each purchase.