Question

Melanie’s Purple Dress Business uses the Perpetual Inventory System.
Melanie’s Purple Dress Business purchased and sold the following merchandise in May:
May 1 Purchased 100 dresses at $100 each
May 2 Sold 50 dresses from the dresses that were purchased on May 1
May 5 Purchased 100 more dresses at $110 each
May 20 Sold 100 more dresses from the dresses that were purchased on May 5

11. Calculate the ending inventory for Melanie’s Purple Dress Business using the
Specific Identification Method.

Answer 1

Under specific identification method

Date	Particular	purchase	cost of goods	ending inventory
May 1	purchase	(100×$100) $10000		(100×$100) $10000
May 2	sold		(50×$100) $5000	(50×$100) $5000
May 5	purchase	(100×$110) $11000		(50×$100) = $5000 (100×$110) = $11000
May 20	sold		(100×$110) $11000	(50×$100 = $5000)

Cost of ending inventory under specific identification method = (50×$100) = $5000

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answered by: anonymous