Accounting

Glanville Distribution uses a periodic inventory system which means that inventory is not updated on a day-to-day basis. At the beginning of March, Glanville had 1,500 Clooney CDs with a unit cost of $7. During March, Glanville made purchases for 3,000, 5,500 and 2,000 units at costs of $8, $9 and $11, respectively. During the same period, Glanville sold 12,500 CDs. At the end of March, Glanville must calculate the ending inventory of Clooney CDs and the corresponding cost. To do this, Glanville will add the beginning inventory to the purchases and subtract the sales amount to determine the ending inventory. The corresponding cost of the ending inventory will be the total cost of all purchases divided by the total number of units.