The Beginning Inventory and Purchases of an Item for the Period

question 194

Essay

The beginning inventory and purchases of an item for the period were as follows: $$\begin{array} { l l } \text { Beginning inventory } & 6 \text { units at } \$ 70 \text { each } \\\text { First purchase } & 10 \text { units at } \$ 75 \text { each } \\\text { Second purchase } & 18 \text { units at } \$ 80 \text { each } \\\text { Third purchase } & 10 \text { units at } \$ 90 \text { each }\end{array}$$ ​
The company uses the periodic system, and there were 15 units in the inventory at the end of the period. Determine the cost of the 15 units in the inventory by each of the following methods, presenting details of your computations: (a) first-in, first-out; (b) last-in, first-out; (c) average cost. Do not round your intermediate calculations. Round your final answer to two decimal places.

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Definitions:

Quick Ratio

A liquidity metric that measures a company's ability to meet its short-term obligations with its most liquid assets.

Debt-Equity Ratio

The ratio showing the blend of debt and equity financing in a company’s strategy for asset accumulation.

Common-Base Year Value

A financial analysis technique in which all figures are expressed in relation to a certain base year, allowing for comparison over time by setting a common reference point.

Accounts Receivable

Receivable sums by a business from its patrons for items or services delivered without formal settlement.