Calculating Ending Inventory and Cost of Goods Sold for 2024
Question:
How can we calculate the ending inventory and cost of goods sold for the year 2024 based on the given data?
Answer:
To calculate the ending inventory and cost of goods sold for the year 2024, we need to consider the inventory purchase transactions made by the company. Since the company sold 20 units of inventory, we first need the details of the inventory purchases, including the quantity and cost of each purchase.
Inventory Purchase Transactions:
Given that the company sold 20 units of inventory in 2024, we need to look at the inventory purchase transactions to calculate the ending inventory and cost of goods sold. Let's break down the steps to calculate these figures:
1. Total Cost of Inventory Purchased:We need to sum up the cost of each purchase transaction made by the company in 2024 to determine the total cost of inventory purchased for the year.
2. Cost of Goods Sold (COGS):COGS can be calculated by multiplying the number of units sold (20 units) by the average cost per unit. This will give us the cost of the inventory that was sold during the year.
3. Average Cost per Unit:In order to calculate the average cost per unit, we divide the total cost of inventory purchased by the total number of units purchased. This will help us determine the cost of each unit on average.
4. Ending Inventory:By subtracting the cost of goods sold from the total cost of inventory purchased, we can find the ending inventory for the year 2024. This will give us the value of the remaining inventory that has not been sold.
By following these steps and considering the inventory purchase transactions, we can accurately calculate the ending inventory and cost of goods sold for the company in 2024.