Company A sells blankets The following transactions occurred

Company A sells blankets. The following transactions occurred during March:

Mar 3

Placed an order on credit with the blanket supplier for 100 blankets at a price of $70 each.

Mar 7

Hired a new employee. The employee will earn $80,000 per year plus benefits.

Mar 17

Received the order placed on March 3. No payment is yet made to the supplier.

Mar 25

Sold 60 of the blankets purchased on March 3. The sale was on credit.  

Mar 28

Received half of the payment for the March 25 sale.

Assuming that there was no inventory in stock prior to March, what is the inventory balance on March 31?

Select one:
a. $7,000
b. $6,000
c. It cannot be determined because the question does not specify which inventory valuation method the company uses
d. None of the above

Solution

The inventory balance on March 31 = (100 - 60) x 70 = $2,800

So, the answer is d. None of the above.