Question

Van Dyke Company reported the following July purchases and sales data. They also had 25 units @ $26 per unit at the beginning of July. The company uses a perpetual inventory system. Sales Units Date Purchases Units Cost/Unit Total Cost July 1 Beginning Inventory 25 $26 = $650 July 3 Purchase 5 $23 = $115 July 8 Sale July 12 Purchase 5 $21 = $105 July 17 Purchase 13 $22 = $286 July 23 Sale July 31 Purchase 9 $24 = $216 Totals 57 $1,372 Calculate the cost of Goods Sold (COGS) and the Ending Inventory for the month using the Specific Indication method and the additional information below. Instructions for specific identification method: 1. Of the 11 items that were sold on July 8; 9 of them were sold from the beginning inventory and 2 of them were sold from the July 3rd purchase 2. The 26 items that were sold on July 23rd; 9 were sold from beginning inventory, 1 were sold from the July 3rd purchase, 4 were sold from the July 12th purchase, and 12 were sold from the July 17th purchase. Cost of Goods Sold: $ Ending Inventory: $0

Answer 1

	Cost of goods sold:
					$
	July 8.	11 units sold as follows:
		9 units at $ 26			234
		2 units at $ 23			46
		Total		a	280
	July 23.	26 units sold as follows:
		9 units at $ 26			234
		1 units at $ 23			23
		4 units at $ 21			84
		12 units at $ 22			264
		Total		b	605
		Cost of goods sold		a+b	885
	Cost of goods sold=Beginning inventory+Purchases-Ending inventory
	Ending inventory=Beginning inventory+Purchases-Cost of goods sold
	Purchases=115+105+286+216=$ 722
	Ending inventory=650+722-885=$ 487