Question

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 250 from the September 5 purchase.)

Date	Activities	Units acquired at cost	Units sold at retail
Jan 1	Beginning inventory	600 units @ \(45.00 per unit
Feb 10	Purchases	400 units @ \)42.00 per unit
March 13	Purchases	200 units @ \(27.00 per unit
March 15	Sales		800 units @ \)75.00 per unit
Aug 21	Purchases	100 units @ \(50.00 per unit
Sep 5	Purchases	500 units @ \)46.00 per unit
Sep 10	Sales		600 units @ $75.00 per unit
	Total	1,800 units	1,400 units

Required

Compute the number of units in ending inventory.

Short answer

There are400 units in ending inventory.

Step-by-step solution

Definition of Perpetual Inventory System

The method of determining the cost of inventory under which the computerized system is used and the balance of the inventory is adjusted or updated after each transaction of sale or purchase is known as a perpetual inventory system.

Calculation of Units in Ending Inventory

Particular	Units
Units available for sale	1,800
Less: Units Sold	(1,400)
Units in Ending Inventory	400 units