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A periodic-system company had beginning inventory 10 units at $4, plus purchases of 10 units at $5 and 10 units at $6. What is the cost of goods available for sale?
A$60
B$90
C$110
D$150
Answer & Solution
Correct answer: D. $150
1. Beginning inventory = $10 \times \$4 = \$40$.
2. Purchases = $(10 \times \$5) + (10 \times \$6) = \$50 + \$60 = \$110$.
3. Cost of goods available for sale = $\$40 + \$110 = \$150$ for 30 units.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §4.1.2 "Periodic Inventory System", p.120_
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