Chapter 18, Problem 1ECP

(a)

To determine

The ending inventory by specific identification method for goods available for sale.

Answer to Problem 1ECP

The cost of ending inventory is $\underset{\_}{\$7,180}$.

Explanation of Solution

Tabulate the given data as shown below.

Date	Units purchased	Unit cost	Total cost
March 1	15 Xbox’s 360	$275	4125
April 1	45 Xbox’s 360	$250	11250
May 1	60 Xbox’s 360	$240	14400
Goods available for sale	120	29,775

From the table;

The number of units available for sale $=120$

The cost of goods available for sale $=29,775$

The calculation of cost of ending inventory is shown below.

Ending inventory	Unit cost	Total cost
2 Xbox’s from March	$275	$550
15 Xbox’s from April	$250	3750
12 Xbox’s from May	$240	2880
Cost of ending inventory		7180

Hence, cost of ending inventory is $\underset{\_}{\$7,180}$.

(b)

To determine

The cost of goods sold by specific identification method for goods available for sale.

Answer to Problem 1ECP

The cost of goods sold is $\underset{\_}{\$22,595}$.

Explanation of Solution

Tabulate the given data as shown below.

Date	Units purchased	Unit cost	Total cost
March 1	15 Xbox’s 360	$275	4125
April 1	45 Xbox’s 360	$250	11250
May 1	60 Xbox’s 360	$240	14400
Goods available for sale	120	29,775

From the table;

The number of units available for sale $=120$

The cost of goods available for sale $=29,775$

The calculation of cost of ending inventory is shown below.

Ending inventory	Unit cost	Total cost
2 Xbox’s from March	$275	$550
15 Xbox’s from April	$250	3750
12 Xbox’s from May	$240	2880
Cost of ending inventory		7180

cost of ending inventory $=\$7,180$.

$\begin{array}{c}\text{Cost of goods sold = Cost of goods available for sale }-\text{ Cost of ending inventory }\\ \text{= 29775 }-\text{ 7180}\\ \text{= \$22595}\end{array}$

Hence, cost of goods sold is $\underset{\_}{\$22,595}$.