Towne Electronics Co. uses a perpetual inventory system. The company\'s beginnin

Question

Towne Electronics Co. uses a perpetual inventory system. The company's beginning inventory of a particular style of large screen televisions and its purchases during the month of January were as follows: Quantity Unit Cost Total Cost Beginning inventory (Jan. 1) Purchase (Jan. 12) Purchase (Jan. 28) Total S200 221 13% S 8,000 4,420 ,580 S14.000 20 10 On January 15, Towne Electronics Co. held its annual Large Screen TV Sale Day. On this day, 55 of these televisions were sold. The remaining 15 units remain in inventory at January 31. Assuming that Towne Electronics uses the average cost formula, the cost of goods sold to be recorded at January 15 is $11,385 $11,315. $11,000 $2,615

Explanation / Answer

1)Average cost at jan 12:=(8000+4420)/(40+20)=207
Cost of goods sold to be recorded=207*55=11385
It is option A

2)Here the total 40 units sold will go from Jun 1 since it is FIFO
Ending inventory=(40*6)+(20*5)+(40*4)=500
It is option C

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