Question

Alphabet Company, which uses the periodic inventory method, purchases different letters for resale. Alphabet had no beginning inventory. It purchased A thru G in January at $4 per letter. In February, it purchased H thru L at $6 per letter. It purchased M thru R in March at $7 per letter. It sold A, D, E, H, J and N in October. There were no additional purchases or sales during the remainder of the year.

If Alphabet Company uses the specific identification method, what is the cost of its ending inventory?

Multiple Choice

• $31

• $69

• $76

• $100

Answer 1

Correct answer---$69

Units available for sale	Cost per unit	Units sold	Units unsold	Ending inventory value
A	$       4.00	Yes
B	$       4.00		B	$       4.00
C	$       4.00		C	$       4.00
D	$       4.00	Yes
E	$       4.00	Yes
F	$       4.00		F	$       4.00
G	$       4.00		G	$       4.00
H	$       6.00	Yes
I	$       6.00		I	$       6.00
J	$       6.00	Yes
K	$       6.00		K	$       6.00
L	$       6.00		L	$       6.00
M	$       7.00		M	$       7.00
N	$       7.00	Yes
O	$       7.00		O	$       7.00
P	$       7.00		P	$       7.00
Q	$       7.00		Q	$       7.00
R	$       7.00		R	$       7.00
Total Ending inventory value				$    69.00