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

calculate the inventory depreciation expense for august using a 25% depreciation rate. (in $000) begin inv. purchases cogs june 70 30 40 july 60 10 50 august 20 50 30 $?

calculate the inventory depreciation expense for august using a 25% depreciation rate. (in $000) begin inv. purchases cogs june 70 30 40 july 60 10 50 august 20 50 30 $?

Answer

Explanation:

Step1: Calculate August ending inventory

First, find the ending - inventory formula: Ending Inventory = Beginning Inventory+Purchases - COGS. For August, Beginning Inventory = 20 (in $000), Purchases = 50 (in $000), and COGS = 30 (in $000). So, Ending Inventory=$20 + 50-30=40$ (in $000).

Step2: Calculate depreciation expense

The depreciation expense formula is Depreciation Expense = Ending Inventory×Depreciation Rate. The depreciation rate is 25% or 0.25, and the ending inventory is 40 (in $000). So, Depreciation Expense = $40\times0.25 = 10$ (in $000).

Answer:

$10,000$