Assume that Toy-Cars Inc. uses a periodic specific identification inventory system. Its ending inventory consists of 2 cars from beginning inventory, 4 cars from the Jan. 5 purchase, and 10 cars from the Jan. 30 purchase. Calculate the dollar value of its ending inventory, based on the information provided below. DateActivity Jan 1Beginning Inventory10 cars @ $12Jan 5Purchase10 cars@ $15Jan 30Purchase10 cars@ $18Multiple choice question.$160$264$450$186
Question
Assume that Toy-Cars Inc. uses a periodic specific identification inventory system. Its ending inventory consists of 2 cars from beginning inventory, 4 cars from the Jan. 5 purchase, and 10 cars from the Jan. 30 purchase. Calculate the dollar value of its ending inventory, based on the information provided below. DateActivity Jan 1Beginning Inventory10 cars @ 15Jan 30Purchase10 cars@ 160450$186
Solution
To calculate the dollar value of the ending inventory, we need to multiply the number of cars from each purchase by their respective prices and then add them together.
From the beginning inventory, we have 2 cars at 24.
From the Jan. 5 purchase, we have 4 cars at 60.
From the Jan. 30 purchase, we have 10 cars at 180.
Adding these together, we get 60 + 264.
So, the dollar value of the ending inventory is $264.
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