A physical count of the remaining inventory reveals that there are 408 units on hand at the end of the period. Now that you know the number of units and cost of goods available for sale during 2012, the next step is to allocate those units to ending inventory or cost of merchandise sold. Recall that beginning inventory and each purchase can be thought of as layers. Each layer must now be allocated to either cost of merchandise sold (an expense) or ending inventory (an asset). Complete the tables below to determine each layer for the cost of merchandise sold and the ending inventory (for ending inventory, start with the last layer and work backwards) Cost of Merchandise Sold Layers Units Cost Total Cost Cost of merchandise sold