Question

Seneca Co. began year 2017 with 6,500 units of product in its January 1 inventory costing \(35 each. It made successive purchases of its product in year 2017 as follows. The company uses a periodic inventory system. On December 31, 2017, a physical count reveals that 8,500 units of its product remain in inventory.

Jan 4	11,500 units @ \)33 each
May 18	13,400 units @ \(32 each
July 9	11,000 units @ \)29 each
Nov 21	7,600 units @ $27 each

Required

1. Compute the number and total cost of the units available for sale in year 2017.

Short answer

Business entity has50,000 units available for sale costing$1,560,000.

Step-by-step solution

Definition of Physical Count

The process of inspecting the inventory held by the business entity to determine the units in the ending inventory is known as physical count.

Number and Cost of Units Available for Sale

Date	Units	X	Per unit	=	Total cost
Beginning	6,500	X	$35	=	$227,500
Jan 4	11,500	X	$33	=	$379,500
May 18	13,400	X	$32	=	$428,800
July 9	11,000	X	$29	=	$319,000
Nov 21	7,600	X	$27	=	$205,200
Total	50,000				$1,560,000