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Chapter $4$: Practice for Points

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Exercise $4-7$A $($Algo$)$ Determining the cost of inventory LO $4-2,4-3,4-4$

For each of the following cases determine the ending balance in the inventory account. $($Hint$.$ First, determine the total cost of inventory available for sale. Next, subtract the cost of the inventory sold to arrive at the ending balance.$)$

a$.$ Jill's Dress Shop had a beginning balance in its inventory account of $$51,000.$ During the accounting period, Jill's purchased $$108,000$ of inventory, returned $$7,200$ of inventory, and obtained $$970$ of purchases discounts. Jill's incurred $$1,440$ of transportation$-$in cost and $$820$ of transportation$-$out cost. Salaries of sales personnel amounted to $$42,000.$ Administrative expenses amounted to $$46,600.$ Cost of goods sold amounted to $$104,300.$

b$.$ Ken's Bait Shop had a beginning balance in its inventory account of $$12,400.$ During the accounting period, Ken's purchased $$54,500$ of inventory, obtained $$1,640$ of purchases allowances, and received $$580$ of purchases discounts. Sales discounts amounted to $$860.$ Ken's incurred $$1,340$ of transportation$-$in cost and $$480$ of transportation$-$out cost. Selling and administrative cost amounted to $$14,500.$ Cost of goods sold amounted to $$38,300.$

$\backslash$table$[[,\backslash$table$[[$Jill$\text{'}$s Dress$],[$Shop$]],\backslash$table$[[$Ken$\text{'}$s Bait$],[$Shop$]]],[$Cost of goods available for sale,,$],[$Ending Inventory,,$]]$

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