Auto Resales, Inc. started business on January 1, 20X1 (beginning inventory balance is zero). On January 1,
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Question:
Auto Resales, Inc. started business on January 1, 20X1 (beginning inventory balance is zero). On January 1, 20X1 the company purchased all of the inventory for their used car sales lot. Purchase information is:
Total cost of the cars purchased | $1,500,000 |
Number of cars purchased | 100 |
Types of cars, number of cars, and sales price per car are as follows:
Number purchased | Sales price per car | |
Ford | 20 | $10,000 |
Lexus | 40 | $20,000 |
BMW | 40 | $25,000 |
Total number of lots | 100 |
During the year, Auto Resales, Inc. sold the following cars:
Ford | 8 |
Lexus | 10 |
BMW | 30 |
Total cars sold | 48 |
Ending inventory in units | 52 |
Using the relative sales value approach, what is the cost allocated to each BMW car?
Using the relative sales value approach, what is the total cost of Ending Inventory (i.e. ending balance of Ending Inventory) on the 12/31/X1 balance sheet?
Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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