During the year, Wright Company sells 475 remote-control airplanes for $120 each. The company has the following inventory purchase transactions for the year.
Date: Transaction: # of Units: Unit Cost: Total Cost:
Jan.1 Beginning inventory 40 $71 $2,840
May.5 Purchase 255 $74 $18,870
Nov.3 Purchase 202 $79 $16,195
500 $37,905
Calculate ending inventory and cost of goods sold for the year, assuming the company uses specific identification. Actual sales by the company include its entire beginning inventory, 245 units of inventory from the May 5 purchase, and 190 units from the November 3 purchase.

The ending inventory is 1975 and the cost of goods sold is 35930

Explanation:

The FIFO ( First in forst out) method will be used for the calculation of ending inventory and the cost of the goods sold for the year.

                                                      FIFO

Cost of Goods Available for Sale   Cost of Goods Sold  Ending Inventory

of units  Average Cost per Unit  Cost of Goods Available for Sale  # of units  Average Cost per Unit  Cost of Goods Sold  # of units  Average Cost per Unit  Ending Inventory

Beginning inventory 40  71  2840  40             71                2840    

Purchases:          

May-05                    255  74  18870  255  74               18870    

Nov-03                    205  79  16195  180    79  14220  25  79         1975

Total                  500  37905  475           35930  25  1975

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