Question

Question 5 (6 points) In 2010, the BowWow Company purchased 19,064 units from its supplier at a cost of $ 11.96 per unit. BowWow sold 19,235 units of its product in 2010 at a price of $ 22.65 per unit. Bow Wow began 2010 with $ 834,312 in inventory (inventory is carried at a cost of $ 11.96 per unit). Using this information, compute Bow Wow's 2010 ending inventory balance in dollars). Record your answer rounded to the nearest dollar. Do not include a dollar sign or commas in your answer. For example, record $1.234,567.89 as 1234568.

Answer 1

Question 5:

Bow Wow 2010 Ending Inventory Balance = 832267 ( $ 832,267)

Bow Wow Ending Inventory = Opening Inventory + Purchased Inventory - Cost of goods sold

Bow Wow Ending Inventory = $ 834,312+(19,064 Units * $11.96)-(19,235 Units * $11.96) = $ 832,266.84

Notes:

1) For cost of goods sold we have considered cost price $11.96 rather than selling price of $ 22.65 because we are calculating closing inventory which should be expressed at cost price.