Question

# 45. A retailer maintains a book (perpetual) inventory system in which all figures are kept at...

45. A retailer maintains a book (perpetual) inventory system in which all figures are kept at cost values. The beginning-of-month inventory as of December 1 is \$100,000; the purchases in December equal \$80,000; and December's sales (at cost) equal \$63,000. The beginning of month inventory for January 1 then equals _____. Select one:

a. \$70,000

b. \$117,000

c. \$170,000

d. \$233,000

The ending inventory of December is the beginning inventory of 1st January. So,

Ending inventory = Beginning inventory + Purchases - Sales

Ending inventory of December = 100,000 + 80,000 - 63,000 =  \$117,000 .

As the ending inventory of December is the beginning inventory of January hence the beginning inventory of 1st January is \$117,000.

Hence except option b other options are not correct. Therefore, option b is the correct answer.

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