Towing Company employs a periodic inventory system and sells its inventory to customers for $34 per...

Name: Towing Company employs a periodic inventory system and sells
Brand: StudyZin
Rating: 3.7 (600 reviews)

Free

60.1K

Verified Solution

Question

Accounting

Towing Company employs a periodic inventory system and sells its inventoryto customers for $34 per unit. Towing Company had the following inventoryinformation available for the month of May:May 1  Beginning inventory 2,200 units @ $17 cost per unitMay 8  Sold 1,700 unitsMay 13  Purchased 1,800 units @ $13 cost per unitMay 18  Sold 1,600 unitsMay 21  Purchased 1,300 units @ $23 cost per unitMay 22  Purchased 1,100 units @ $15 cost per unit May 28  Sold 1,300 unitsMay 30  Purchased 1,600 units @ $10 cost per unitDuring May, Towing Company reported operating expenses of $49,000 and hadan income tax rate of 32%.Calculate the dollar amount of ending inventory shown on Towing Company'sMay 31 balance sheet using the weighted average method.

Answer & Explanation Solved by verified expert

3.7 Ratings (600 Votes)

Correct Answer: Value Of Ending Inventory $ 52,360.00

Solution :

	Units	Cost per unit	value
Beginning Balance	2200	$ 17.00	$ 37,400.00
Purchases
13-May	1800	$ 13.00	$ 23,400.00
21-May	1300	$ 23.00	$ 29,900.00
22-May	1100	$ 15.00	$ 16,500.00
30-May	1600	$ 10.00	$ 16,000.00


Total units purchased in the month	8000		$ 1,23,200.00

Average Cost of Inventory

Units	(A)	8000
Total Cost	(B)	$ 1,23,200.00
Average Cost	(C=B/A)	$ 15.40

Weighted Average method
Total Units Available for sale		8000
Units Sold	1700+1300+1600=4600	4600
Closing Stock in Units		3400

Valuation
Ending Inventory	3400	@	$ 15.40	$ 52,360.00

Value Of Ending Inventory				$ 52,360.00

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Towing Company employs a periodic inventory system and sells its inventory to customers for $34 per...

Free

60.1K

Verified Solution

Question

Accounting

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Membership Benefits:

Other questions asked by students

olying Developm imit 1 30 00 Time Left 1

Almost all of the data that is collected from radiosonde is displayed on which of...

9 Consider rhombus ABCD A B a Find the resultants of AB AD and AB...

Which statement about the S3 method is incorrect The t test is an example of...

Find the derivative of the function y cos a x y x

Software LLC 6 Sa 6 3b A B C D Sab 6a 4b b 3...

Condensed financial data of Novak Corp. follow. Novak Corp. Comparative Balance Sheets December...

**** Scenario 22: Statement: Liam retired at age 51 and...

A yard tool manufacturer can produce either metal shovels or rakes. Given the following estimated...

Which of the following is NOT a type of depository institution? Which of the following...

An account is charging 2% monthly interest. The effective annual interest rate is closest to

A bond with exactly five years until maturity paying 6% p.a. coupons semi-annually and with...