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 $45,500. During the accounting period, Jill's purchased $91,500 of inventory, returned $6,100 of inventory, and obtained $860 of purchases discounts. Jill's incurred $1,220 of transportation-in cost and $710 of transportation-out cost. Salaries of sales personnel amounted to $36,500. Administrative expenses amounted to $41,100. Cost of goods sold amounted to $93,300.

Question

Edsel

Business

21 June, 18:23

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 $45,500. During the accounting period, Jill's purchased $91,500 of inventory, returned $6,100 of inventory, and obtained $860 of purchases discounts. Jill's incurred $1,220 of transportation-in cost and $710 of transportation-out cost. Salaries of sales personnel amounted to $36,500. Administrative expenses amounted to $41,100. Cost of goods sold amounted to $93,300.

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Answers (1)

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Albert · Answer 1

The ending balance in the inventory account is $37,960

Explanation:

For computing the ending balance, first we have to compute the cost of inventory which is available for sale

So, the cost of inventory which is available for sale equals to

= Beginning balance of inventory + purchased - purchase return - purchase discount + in transportation cost

= $45,500 + $91,500 - $6,100 - $860 + $1,220

= $131,260

Now the ending inventory would be

= Cost of inventory which is available for sale - Cost of goods sold

= $131,260 - $93,300

= $37,960