Question

During the year, Wright Company sells 500 remote-control airplanes for $120 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 40 $ 68 $ 2,720 May. 5 Purchase 270 71 19,170 Nov. 3 Purchase 220 76 16,720 530 $ 38,610 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, 250 units of inventory from the May 5 purchase, and 210 units from the November 3 purchase.

Answer 1

Wright Company

Cost of goods sold = $36,430

Ending inventory = $2,180

Step-by-step explanation:

a) Data and Calculations:

Date Transaction Number of Units Unit Cost Total Cost

Jan. 1 Beginning inventory 40 $ 68 $ 2,720

May. 5 Purchase 270 71 19,170

Nov. 3 Purchase 220 76 16,720

Total available for sale 530 $ 38,610

Specific identification of Sales of 500 units:

Cost of goods sold:

Jan. 1 Beginning inventory 40 $ 68 $ 2,720

May. 5 Purchase 250 71 17,750

Nov. 3 Purchase 210 76 15,960

Total 500 $36,430

Cost of goods sold = $36,430

Ending inventory:

May. 5 Purchase 20 71 $1,420

Nov. 3 Purchase 10 76 760

Total 30 $2,180

Ending inventory = $2,180