Required information

Skip to question

$[$The following information applies to the questions displayed below.$]$

You have been given responsibility for overseeing a bank$$s small business loans division. The bank has included loan covenants requiring a minimum current ratio of $3\mathrm{.}00$ in all small business loans. When you ask which inventory costing method the covenant assumes, the previous loans manager gives you a blank look. To explain to him that a company$$s inventory costing method is important, you present the following balance sheet information.

Current assets other than inventory $ $15$

Inventory $($a$)$

Other $($noncurrent$)$ assets $117$

Total assets $ $($b$)$

Current liabilities $ $46$

Other $($noncurrent$)$ liabilities $54$

Stockholders$$ equity $($d$)$

Total liabilities and stockholders$$ equity $ $($c$)$

You ask the former loans manager to find amounts for $($a$),($b$),($c$),$ and $($d$)$ assuming the company began the year with $7$ units of inventory at a unit cost of $$14,$ then purchased $10$ units at a cost of $$15$ each, and finally purchased $8$ units at a cost of $$19$ each. A year$-$end inventory count determined that $7$ units are on hand.

Determine the amount for $($a$)$ using Weighted Average, and then calculate $($b$)$ through $($d$).$