22. Pink Co. purchases 40 units of inventory at $50 per unit. After having the inventory on hand for a period of time, they find the Net Realizable value of each unit to be $65 . What will Pink Co. record for the total value of the inventory?
$600
$ 2,000
$ 3,250
$2,600
Question 2
24. Barnes & Noble begins 2019 with $45,000 of inventory, they have purchases of $350,000, and COGS of $325,000. What is their inventory turnover ratio?
$ 5.65
$6.09
$7.22
$5.00
Question 3
Target has $250,000 in net sales and a gross profit percentage of 15%. What was Target’s COGS?
$37,500
$ 294,117.65
$ 55,000
$212,500
22. Inventory will record at cost or NRV which ever is lower. Here cost is the lowest. so it will record at cost of purchase. $50*40 = $2,000
Answer is B. $2,000
24.
| Beginning inventory | $ 45,000 |
| Add: Purchases | $ 3,50,000 |
| Less: COGS | $ -3,25,000 |
| Ending inventory | $ 70,000 |
| Average inventory ($70,000+$45,000)/2) | $ 57,500 |
| Inventory turnover ratio = Cost of goods sold / Average inventory |
| Inventory turnover ratio = $325,000 / $57,500 |
| Inventory turnover ratio = 5.65 |
Answer is A. $5.65
Q3.
| Target Cost of goods sold = $250,000*85% |
| Target Cost of goods sold = $212,500 |
Answer is D. $212,500
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