82.3k views
4 votes
1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification method.

User Bgraves
by
5.2k points

1 Answer

1 vote

Answer:

Too much information is missing, so I looked for a similar question that can hopefully serve as an example:

Hemming uses a periodic inventory system. Assume that ending inventory is consists of 45 units from the March 14 purchase, 85 units from the July 30 purchase, and all 185 units from the October 26 purchase. Using the specific identification method, calculate the (a) the cost of goods sold and (b) the gross profit.

  • Cost of goods sold (COGS) = $20,999
  • Gross profit = $27,175
  • Value of ending inventory = $8,071

In total 1,425 units were purchased or remained from last year's ending inventory. Total cost of the 1,425 units was $29,070.

The company sold in total 1,110 units at $43.30 per unit for a total of $48,174.

the ending inventory using the specific identification method:

  • 45 units x $18.40 = $828
  • 85 units x $23.40 = $1,989
  • 185 units x $28.40 = $5,254
  • total value of ending inventory = $8,071

Cost of goods sold (COGS) = total inventory cost - ending inventory = $29,070 - $8,071 = $20,999

gross profit = total revenue - COGS = $48,174 - $20,999 = $27,175

1. Calculate ending inventory and cost of goods sold at March 31, using the specific-example-1
User Adil
by
4.9k points