Use this information to answer the following question. A periodic inventory system is used.
Using the specific identification method and assuming that 50 of the items left are from the February 13 purchase and the rest are from the February 20 purchase, the cost assigned to ending inventory is
A) $1,920.
B) $1,656.
C) $1,686.
D) $1,588.

Question

Use this information to answer the following question.  A periodic inventory system is used.
Using the specific identification method and assuming that 50 of the items left are from the February 13 purchase and the rest are from the February 20 purchase, the cost assigned to ending inventory is
A) $1,920. 
B) $1,656. 
C) $1,686. 
D) $1,588.

Quizplus · Accepted Answer

First, we calculate the cost assigned to the 50 items from the February 13 purchase:

50 items * $32.70 per item = $1,635

Then, we calculate the cost assigned to the remaining items from the February 20 purchase:

150 items * $10.40 per item = $1,560

Adding these two amounts together:

$1,635 + $1,560 = $3,195

To find the cost assigned to ending inventory, we subtract the cost of goods sold:

$3,195 - $1,509 = $1,686

Therefore, the best choice is C, $1,686.

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