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Financial & Managerial Accounting
Found in: Page 265
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. (For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase.) Date Activities Units Acquired at Cost.

Date

Activities

Units acquired at cost

Units sold at retail

March 1

Beginning inventory

100 units @ $50.00 per unit

March 5

Purchase

400 units @ $55.00 per unit

March 9

Sales

420 units @ $85.00 per unit

March 18

Purchase

120 units @ $60.00 per unit

March 25

Purchase

200 units @ $62.00 per unit

March 29

Sales

160 units @ $95.00 per unit

Total

820 units

580 units

Required

2. Compute the number of units in ending inventory.

There is a total of 240 units in the ending inventory of the business entity.

See the step by step solution

Step by Step Solution

Step 1: Definition of Sales Revenue

The benefits generated by the business entity by selling the merchandise or services to the customers are known as sales revenue.

Step 2: Calculation of Units in Ending Inventory

Particular

Units

Total units available for sale

820

Less: Units Sold

(580)

Ending Inventory

240 units

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