The Following Information Is Available for Clancy Company Assume That Clancy Uses a Periodic Inventory System and That

question 65

Essay

The following information is available for Clancy Company: $\begin{array}{ll}\text { Beginning inventory } & 600 \text { units at } \$ 4 \\\text { First purchase } & 900 \text { units at } \$ 6 \\\text { Second purchase } & 500 \text { units at } \$ 7.20\end{array}$ Assume that Clancy uses a periodic inventory system and that there are 760 units left at the end of the month.
Instructions
Compute each of the following under the average-cost method:
(a) Cost of ending inventory.
(b) Cost of goods sold.

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Definitions:

Available-For-Sale Securities

Financial assets that are not classified as held-to-maturity or trading securities, and can be sold in the market.

Stock Investments

Refers to the purchasing of shares in companies with the expectation of earning a return through dividends, share price appreciation, or both.

Loss on Sale

The financial loss incurred when the selling price of an asset is less than its carrying value on the balance sheet.

Gain on Sale

A financial gain that occurs when the selling price of an asset exceeds its purchase price or book value.