Waterway Company uses a periodic inventory system. For April, when the company sold 450 units, the following information is available. April 1 inventory April 15 purchase April 23 purchase Units Unit Cost 260 360 380 1,000 $29 35 38 Total Cost $7,540 12,600 14,440 $34,580

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.