BUS 120

Show your understanding of what merchandise is by completing the following sentence. Merchandise consists of _______ that a company acquires to resell to _______ . Use one word for each blank.

Blank 1: products, goods, items, inventory, or assets Blank 2: customers, consumers, or buyers

A company uses a periodic inventory system. On August 1, the company had 6 items of beginning inventory with a cost of $7 per unit. On August 3, the company purchased 16 units at $14 per unit. Then, on August 5, the company sold 12 units. The 12 units sold consisted of 7 units from the August 3rd purchase and 5 units from the August 1st beginning inventory. Using specific identification, the cost of the 12 units sold is _____.

Cost of goods sold= $7*$14 + 5*7 units= $133

Merchandise inventory includes:

costs to purchase shipping costs costs to prepare for sale