Determining the cost of inventory
Required:
For each of the following cases determine the ending balance in the inventory account.
a. Mona's Dress Shop had a beginning balance in its inventory account of $20,000. During the accounting period Mona's purchased $68,000 of inventory, returned $4,000 of inventory, and obtained $640 of purchases discounts. Mona's incurred $1,200 of transportation in cost and $1,600 of transportation out cost. Salaries of sales personnel amounted to $26,500. Administrative expenses amounted to $42,000. Cost of goods sold amounted to $65,800.
b. Ben's Boat Shop had a beginning balance in its inventory account of $8,000. During the accounting period Ben's purchased $36,900 of inventory, obtained $1,200 of purchases allowances, and received $360 of purchases discounts. Sales discounts amounted to $640. Ben's incurred $900 of transportation in cost and $260 of transportation out cost. Selling and administrative cost amounted to $12,300. Cost of goods sold amounted to $33,900.