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12 January, 05:40

Beginning inventory, purchases, and sales for Product XCX are as follows:

Oct 01 Beginning Inventory 26 units $15

Oct 05 Sale 13 units

Oct 17 Purchase 20 units $16

Oct 30 Sale 18 units

Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the cost of the merchandise sold for the October 30 sale and (b) the inventory on October 31.

a) Cost of merchandise sold $

b) Inventory, October 31 $

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  1. 12 January, 05:59
    0
    Cost of merchandise sold = $483, Closing stock = $227

    Explanation:

    Perpetual inventory system includes updates done, when sale or purchase transaction happens

    Opening Stock = 26 units (price 15). Value = 26 x 15 = 390

    Sale = 13 units, price 15. So, sales cost value = 13 x 15 = 195

    Purchase = 20 units (price 16). Value = 20 x 16 = 320

    Sale = 18 units, price 16. So, sales cost value = 18 x 16 = 288

    Total sales cost value, or cost of merchandise sold = 195 + 288 = 483

    Closing stock = Opening stock + purchase - sales cost

    = 390 + 320 - 483

    = $227
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