oblem 6-13A (Part Level Submission) ue Ltd. had a beginning inventory on January

ID: 2541894 • Letter: O

Question

oblem 6-13A (Part Level Submission) ue Ltd. had a beginning inventory on January 1 of 250 units of product SXL at a cost of $158 per unit. During the year, purchases were as follows: ar. 15 700 uly 20 500 ept. 4 450 Dec. 2 100 Units Unit Cost Total Cost $148 $103,600 146 73,000 136 61,200 124 12,400 Blue uses a periodic inventory system. At the end of the year, a physical inventory count determined that there were 200 units on hand. (a) Determine the cost of goods available for sale Cost of Goods Available for Sale

Explanation / Answer

Solution:

Periodic Inventory System

Periodic Inventory system is a system of inventory in which inventories are updated on a periodic basis. Periodic basis may be monthly, quarterly, weekly, half yearly or yearly. In this system, inventories are not kept up to date.

Calculation of Cost of Goods Available for Sale

Periodic Inventory System

Cost of Goods Available for sale

# of Units

Cost per Unit

Cost of Goods Available for Sale

Beginning Inventory, Jan.1

250

$158.00

$39,500

Purchases:

Mar.15

700

$148.00

$103,600

July.20

500

$146.00

$73,000

Sept.4

450

$136.00

$61,200

Dec.2

100

$124.00

$12,400

Total

2000

$289,700

Cost of Goods Available for Sale = $289,700