Question

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Carlson Auto Dealers Inc. sells a handmade automobile as its only product. Each automobile is identical; however, they can be distinguished by their unique ID number. At the beginning of 2021, Carlson had three cars in inventory, as follows:

Car ID	Cost
203	$	63,000
207		63,000
210		66,000

During 2021, each of the three autos sold for $93,000. Additional purchases (listed in chronological order) and sales for the year were as follows:

Car ID	Cost			Selling Price
211	$	60,000		$	93,000
212		60,000			96,000
213		61,500		not sold
214		63,000			99,000
215		66,000			103,500
216		67,500		not sold
217		69,000			108,000
218		69,300			109,500
219		72,000		not sold

Required:
1. Calculate 2021 ending inventory and cost of goods sold assuming the company uses the specific identification inventory method.

Answer 1

Cost of Goods sold = Opening Inventory + Purchases - Ending inventory

Opening Inventory:
Car ID	Cost
203	63000
207	63000
210	66000
	192000

Purchases
Car ID	Cost
211	60000
212	60000
213	61500
214	63000
215	66000
216	67500
217	69000
218	69300
219	72000
	588300

Cost of goods sold	=192000+588300-201000
	579300
Cost of goods sold is 579300