Question:
Basic Cost Flow Model
The Office Mart store in South Beach experienced the following events during the current year:
1. Incurred $200,000 in marketing costs.
2. Purchased $600,000 of merchandise.
3. Paid $20,000 for transportation-in costs.
4. Incurred $200,000 of administrative costs.
5. Took an inventory at year-end and learned that goods costing $100,000 were on hand. This compared with a beginning inventory of $150,000 on January 1.
6. Determined that sales revenue during the year was $1,500,000.
7. Debited all costs incurred to the appropriate account and credited to Accounts Payable. All sales were for cash.
Required
Give the amounts for the following items in the Merchandise Inventory account:
a. Beginning balance ( BB ).
b. Transfers-in ( TI ).
c. Ending balance ( EB ).
d. Transfers-out ( TO ).