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The Bridal Gift Shop, Inc. has 11 units in ending merchandise inventory on December 31. The units were purchased in November for $150 each. The price lists from suppliers indicate the current replacement cost of the item to be $152 each. What would be the amount reported as Merchandise Inventory on the balance sheet?

A $1,650
B. $3.322
C. $1,672
D. $302

User GoodViber
by
9.2k points

1 Answer

2 votes

Answer:

A $1,650

Explanation:

The computation of amount reported as Merchandise Inventory on the balance sheet is shown below:-

Merchandise inventory = Ending merchandise inventory × Units purchased

= 11 × $150

= $1,650

Therefore for computing the Merchandise Inventory we simply applied the above formula and have not considered the replacement cost as it is not relevant.

User Tbeu
by
7.8k points
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