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

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

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

Answer

Explanation:

Step1: Calculate July's ending inventory

First, find the goods available for sale in July. Goods available for sale = Beginning inventory + Purchases. So, for July, goods available for sale = $10 + 70=80$ (in $000$). Then, ending inventory = Goods available for sale - COGS. Ending inventory = $80 - 20 = 60$ (in $000$).

Step2: Calculate inventory depreciation expense

Depreciation expense = Ending - inventory × Depreciation rate. Given a 25% depreciation rate, the depreciation expense = $60\times0.25 = 15$ (in $000$).

Answer:

$15000$