Weasley's Wizard Wheezes, Inc. (WwW) began its business in January 2019 as a wholesale distributor of candy. WWW's purchases throughout 2019 are shown below. WWW sold 250,000 units at $2.00 each during 2019. Units Purchased Unit Cost $0.90 Total Cost $27,000 January 2 30,000 February 5 25,000 0.88 22,000 March 10 33,300 0.90 29,970 38,000 76,398 63,000 40,000 April 15 July 10 0.95 74,900 1.02 October 13 60,000 1.05 December 31 20,000 1.20 24,000 $280,368 283,200 What is the amount of WWW's cost of goods sold during 2019 using the first-in, first-out (FIFO) cost flow assumption for its candy inventory? (Enter a whole number without a dollar sign.)

Q: How is Day Sales in Inventory calculated?

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Q: What are the different methods to estimate inventory?

A:

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Q: How do you find the ending inventory?

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Q: Under what circumstances would the gross profit method of estimating inventory be used?

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Q: Define inventory shrinkage.

A:

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Q: What's the difference between the cost to inventory and the cost of goods sold?

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.