Jim has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds, and pistachios.
During its first month of activity, the company has made the following transactions:
Besides these transactions, the company has had the following expenses:
Electricity bill: $350
Renting of equipment: $900
Rent of warehouse and office: $1.600
Jim’s accountant recommended that he should use the average cost method in order to determine the cost of the inventory sold but he is not sure about the consequences it may have on his financial situation.
Relying on your accounting knowledge, Jim asks you the following questions: