The Baby Store had a beginning inventory on January 1 of 320 full-size strollers at a cost of $180 per unit. During the year, the following purchases were made:     Units   Unit Cost Mar. 15   78   $181   July 20   62   180   Sept. 4   25   178   Dec. 2   10   173   At the end of the year, there were 35 units on hand. The Baby Store uses a periodic inventory system. Determine the cost of the ending inventory and the cost of goods sold using (1) FIFO and (2) weighted average

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A:

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A:

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A:

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A:

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.