Question

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

600

units

@ $40 per unit

Feb.

10

Purchase

400

units

@ $37 per unit

Mar.

13

Purchase

190

units

@ $15 per unit

Mar.

15

Sales

805

units

@ $70 per unit

Aug.

21

Purchase

190

units

@ $45 per unit

Sept.

5

Purchase

550

units

@ $43 per unit

Sept.

10

Sales

740

units

@ $70 per unit

Totals

1,930

units

1,545

units

Required:
1. Compute cost of goods available for sale and the number of units available for sale.

	Cost of goods available for sale Number of units available for sale units

2. Compute the number of units in ending inventory.

	Ending inventory units

Answer 1

1) compute cost of goods available for sale and number of units available for sale

Date	particular	units × per unit	amount
Jan 1	beginning inventory	600×$40	$24000
Feb10	purchases	400×$37	$14800
March 13	purchases	190×$15	$2850
Aug 21	purchases	190×$45	$8550
Sept 10	purchases	550¶$43	$23650

Cost of goods available for sale ($24000+$14800+$2850+$8550+$23650) = $73850

No of units available for sale = (600+400+190+190+550) = 2030units

2) ending inventory units

No of units available for sale - units sold = ending inventory units

Ending inventory = 2030 units - 1545 units = 485 units

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