Valuing Inventory and Recording Entries Using Relative Sales Value Method AVC Inc. purchased 3,120 bags of pecans that cost $10,920. The company also incurred $780 for transportation and grading. The relative sales value method is used to allocate the lump sum cost. The pecans graded out as follows. Grade Quantity (bags) Current Market Price per Bag A B 1040 1560 C 260 Waste 260 $6.75 6.00 4.50 0.00 Required a. Prepare the purchase entry assuming a perpetual inventory system. b. Determine the value of ending inventory assuming the following quantities are in inventory at year-end: grade A, 260 bags; grade B, 208 bags; and grade C, 104 bags. c. Prepare the entry for sale of 52 bags of grade A pecans at a market price of $6.75 cash per bag. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Account Name a. Inventory-Grade A Inventory-Grade B Inventory-Grade C Accounts Payable To record the purchase of inventory. b. Inventory-Grade A $ 5,916 x Inventory-Grade B 4,207 x Inventory-Grade C 1,578 x Total $ 11,700 x C Cash Cost of Goods Sold Sales Account Name Inventory-Grade A To record the sale of pecans. > > > > > Dr. 4,680 0 6,240 0 780 0 0 11,700 Dr. 351 0 0 351 x 0 0x 0 0x