calculate the inventory depreciation expense for august using a 25% depreciation rate.\n(in $000) begin inv…

calculate the inventory depreciation expense for august using a 25% depreciation rate.\n(in $000) begin inv. purchases cogs\njune 70 30 40\njuly 60 10 50\naugust 20 50 30

calculate the inventory depreciation expense for august using a 25% depreciation rate.\n(in $000) begin inv. purchases cogs\njune 70 30 40\njuly 60 10 50\naugust 20 50 30

Answer

Explanation:

Step1: Calculate August's ending inventory before depreciation

First, find the cost of goods available for sale in August. Cost of goods available for sale = Beginning inventory + Purchases. So, for August, cost of goods available for sale = $20 + 50=70$ (in $000$). Then, ending inventory before depreciation = Cost of goods available for sale - COGS. Ending inventory before depreciation = $70 - 30 = 40$ (in $000$).

Step2: Calculate inventory depreciation expense

Depreciation expense = Ending inventory before depreciation × Depreciation rate. Depreciation rate is $25%=0.25$. So, depreciation expense = $40\times0.25 = 10$ (in $000$).

Answer:

$10000$