1. Specific identification method . Boston Galleries uses the specific identific

Question

1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows.

                                        Painting

                     Cost

1/2 Beginning inventory

Woods

$21,000

4/19 Purchase

Sunset

21,800

6/7 Purchase

Earth

31,200

12/16 Purchase

Moon

4,000

Woods and Moon were sold during the year for a total of $35,000. Determine the firm’s

a. cost of goods sold.

b. gross profit.

c. ending inventory.

                                        Painting

                     Cost

1/2 Beginning inventory

Woods

$21,000

4/19 Purchase

Sunset

21,800

6/7 Purchase

Earth

31,200

12/16 Purchase

Moon

4,000

Explanation / Answer

a. cost of goods sold.
$15,000
b. gross profit.
$20,000
c. ending inventory.
$53,000


Cost of Goods Sold: $11,000 + 4,000 = $15,000
Gross Profit: $35,000 - 15,000 = $20,000
Ending Inventory: $21,800 + 31,200 = 53,000

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