Question

During the year, Wright Company sells 475 remote-control airplanes for $120 each. The company has the following inventory purchase transactions for the year.

Date: Transaction: # of Units: Unit Cost: Total Cost:
Jan.1 Beginning inventory 40 $71 $2,840
May.5 Purchase 255 $74 $18,870
Nov.3 Purchase 202 $79 $16,195
500 $37,905
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, 245 units of inventory from the May 5 purchase, and 190 units from the November 3 purchase.

Answer 1

The ending inventory is 1975 and the cost of goods sold is 35930

Step-by-step explanation:

The FIFO ( First in forst out) method will be used for the calculation of ending inventory and the cost of the goods sold for the year.

FIFO

Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory

of units Average Cost per Unit Cost of Goods Available for Sale # of units Average Cost per Unit Cost of Goods Sold # of units Average Cost per Unit Ending Inventory

Beginning inventory 40 71 2840 40 71 2840

Purchases:

May-05 255 74 18870 255 74 18870

Nov-03 205 79 16195 180 79 14220 25 79 1975

Total 500 37905 475 35930 25 1975