Assume That Three Identical Units of Merchandise Were Purchased During

question 85

Essay

Assume that three identical units of merchandise were purchased during October, as follows: $$\begin{array} { | l | l | l | l | l | } \hline & & & \text { Units } & \text { Cost } \\\hline \text { October } & 5 & \text { Purchase } & 1 & \$ 5 \\\hline & 12 & \text { Purchase } & 1 & 13 \\\hline & 28 & \text { Purchase } & 1 & 15 \\\hline \text { Total } & & & \underline { 3 } & \$ 33 \\\hline\end{array}$$ Assume one unit is sold on October 31 for $28. Determine cost of merchandise sold, gross profit, and ending inventory under the average cost method.

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Definitions:

Yen Appreciates

This occurs when the value of the Japanese yen increases relative to other currencies in the foreign exchange market.

Dollar Appreciates

An increase in the value of the US dollar compared to other currencies, making imports cheaper and exports more expensive.

Balance Of Payments

A record of all financial transactions between a country and the rest of the world.

Capital Account

In economics, part of a nation's balance of payments that records all transactions involving the purchase and sale of assets such as stocks, bonds, and real estate.