Question

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 $52,500. During the accounting period, Jill’s purchased $112,500 of inventory, returned $7,500 of inventory, and obtained $1,000 of purchases discounts. Jill’s incurred $1,500 of transportation-in cost and $850 of transportation-out cost. Salaries of sales personnel amounted to $43,500. Administrative expenses amounted to $48,100. Cost of goods sold amounted to $107,300.(b) Ken’s Bait Shop had a beginning balance in its inventory account of $8,000. During the accounting period, Ken’s purchased $36,900 of inventory, obtained $1,200 of purchases allowances, and received $360 of purchases discounts. Sales discounts amounted to $640. Ken’s incurred $900 of transportation-in cost and $260 of transportation-out cost. Selling and administrative cost amounted to $12,300. Cost of goods sold amounted to $33,900.

Answer 1

A. $60,200

B. $10,340

Step-by-step explanation:

As per the data given in the question,

A.

Amount

Beginning inventory $52000

Purchased during year(Add) $122,500

Purchase return (Less) $7,500

Purchase discount(Less) $1,000

Inward transportation cost (Add) $1,500

Cost of inventory available for sale $167,500

Cost of goods sold (Less) $107,300

Ending inventory $60,200

B.

Amount

Beginning inventory $8,000

Add: Purchased during year $36,900

Less: Purchase return $1,200

Less: Purchase discount $360

Add: Inward transportation cost $900

Cost of inventory available for sale $44,240

Less: Cost of goods sold $33,900

Ending inventory $10,340