Chess Top Uses the Periodic Inventory System

question 27

Multiple Choice

Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted of 360 units that cost $65 each. During the month, the company made two purchases: 540 units at $68 each and 270 units at $70 each. Chess Top also sold 900 units during the month. Using the average cost method, what is the amount of ending inventory?

• A) $18,900.
• B) $60,786.
• C) $60,120.
• D) $18,236.

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Definitions:

Depreciation And Amortization

Accounting techniques that gradually reduce the value of a company's tangible and intangible assets over time.

Non-Callable

A term referring to a bond or other fixed-income security that cannot be redeemed by the issuer before its maturity date.

Long-Term Debt

Debt obligations that are due in more than one year, used by businesses and governments to finance their operations.

Common Shares

Common Shares are units of ownership in a company that entitle the shareholders to vote at shareholders' meetings and receive dividends.