Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2022. All watches are sold for $740 each.

Jul.17Purchased 86 watches for $12,900 ($150 per watch) on account.Jul.31Sold 84 watches for $62,160 cash.Aug.12Purchased 64 watches for $10,240 ($160 per watch) cash.Aug.22Sold 54 watches for $39,960 on account.Sep.19Paid for watches purchased on July 17.Sep.27Receive cash of $23,976 for watches sold on account on August 22.Oct.27Purchased 140 watches for $23,800 ($170 per watch) cash.Nov.20Sold 114 watches for $84,360 cash.Dec.4Purchased 124 watches for $22,320 ($180 per watch) on account.Dec.8Sold 64 watches for $47,360 on account.

Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $100 per watch.

Having a problem with Cost of goods Sold: