Question
5a. A company with a perpetual inventory system purchases 2,000 items of inventory for $50 per item. The goods are shipped to the company as
5a. A company with a perpetual inventory system purchases 2,000 items of inventory for $50 per item. The goods are shipped to the company as FOB destination. The freight cost is $1,000. The company then sells 1,100 items for $70 per item. These goods are shipped FOB destination to the customer at a cost of $450. Assuming that these are the only events that take place during this accounting period, what is the cost of inventory on hand at the end of the accounting period?
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$46,000
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$45,550
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$24,000
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$45,000
5b. What is Cost of Goods Sold? Gross margin? Operating income?
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