Question

25. At the end of last year, Helen's, Inc. (uses a periodic inventory system with a physical inventory count taken only at year-end) had merchandise costing $115,000 in inventory. During January of the current year, the company purchased merchandise costing $35,000, and sold merchandise which it had purchased at a total cost of $55,000.

Based on the foregoing information, the amount of costs transferred from the inventory account to the cost of goods sold account during January was:

26. At the end of last year, Helen's, Inc. (uses a periodic inventory system with a physical inventory count taken only at year-end) had merchandise costing $115,000 in inventory. During January of the current year, the company purchased merchandise costing $35,000, and sold merchandise which it had purchased at a total cost of $55,000.

Based on the foregoing information ,the total debited to the inventory account during January was:

27. At the end of last year, Helen's, Inc. (uses a perpetual inventory system) had merchandise costing $115,000 in inventory. During January of the current year, the company purchased merchandise costing $35,000, and sold merchandise which it had purchased at a total cost of $55,000.

Based on the foregoing information ,the balance in the inventory account at January 31 was:

Answer 1

25. The correct answer will be $0. It is because Helen's, Inc. uses a periodic inventory system and no inventory from the previous year is sold and so no amount of costs is transferred from the inventory account to the cost of goods sold account during January.

26. The correct answer will be $0. It is because Helen's, Inc. uses a periodic inventory system and the inventory which is purchased on January is sold in January itself so it will not be counted when physical count is taken.

27. The balance in the inventory account at January 31 was $115,000. It is because previous year inventory is not sold at all and the inventory purchased in january is sold in january itself. So, the previous year inventory will be the inventory for January too.