A physical inventory on December 31 shows 4000 units on hand. Waterway sells the units for $13 each. Waterway uses the periodic inventory method. What is the cost of goods available for sale?

Question Completion:

Waterway Company's records show the following inventory activity:

Inventory, Jan. 1 Units 10,000 Cost $9.20

Purchase, June 18 Units 9,000 Cost $8.00

Nov.8 Units 6,000 Cost$7.00

Waterway Company

The cost of goods available for sale is:

$206,000.

Explanation:

a) Data and Calculations:

Ending inventory = 4,000 units

Selling price of units = $13 each

Inventory Records:

Inventory, Jan. 1    10,000 Cost $9.20     $92,000

Purchase, June 18 9,000 Cost $8.00        72,000

Purchase, Nov.8    6,000 Cost$7.00         42,000

Cost of goods available for sale =       $206,000

b) The cost of goods available for sale is the value of beginning inventory and all purchases during the period.  It is from this total that costs are allocated to the cost of goods sold and the ending inventory.