 In this example I want to cover how to value inventory using specific unit costing. We make no cost-flow assumptions with this method so you are going to be given the exact items sold and the exact items remaining in inventory. Let's assume the following inventory data. March 1st beginning inventory is 200 units at $10 each. March 4th we purchased an additional 300 units at $20 each. March 10th we sold 400 units at $50 each. Now that's the retail price the $50 not the cost. The cost of the unit sold came from March 10th 100 units at $10 each and 300 units at $20 each. We will use this information when we record the March 10th sale in the journal. Continuing March 20th we purchased an additional 500 units at $30 each. March 25th we sold 300 units at a price of $50 each. The cost of the unit sold on March 25th were 50 units at $10 and 250 units at $30 each. Again we'll use this information when we record the March 25th sale in the journal. Finally March 30th we purchased 100 units at $40 each. With this data and the specific unit costing let's record the March 10th and March 25th sale as well as determine the value of ending inventory. If you want to pause the video at this moment and write down those numbers I would encourage you to do that. In order to record the March 10th sale we need to figure out the sales revenue amount and the cost of goods sold. We sold 400 units at $50 each so sales revenue is $20,000. The cost of the 400 units sold is $7,000. I know this because we sold 100 units at $10 each excuse me the cost is $10 each and 300 units at a cost of $20. That totals $7,000. So we debit a count receivable let's assume they were sold on account and credit sales revenue for $20,000 the retail price of the goods. We also debit costs of goods sold and credit inventory for the cost of the inventory sold which was $7,000. In order to record the March 25th sale we need to figure out sales revenue amount and costs of goods sold. We sold 300 units at $50 each so sales revenue is $15,000. The cost of the 300 units sold is $8,000. I know this because we sold 50 units that cost $10 and 250 units that cost $30. Those total $8,000. So again we debit accounts receivable and credit sales revenue for $15,000. We also debit costs of goods sold and credit inventory for the cost of the inventory item sold which is $8,000. Now let's figure out the value of the ending inventory. Since we are given the amounts in ending inventory just total the units in this case 400 units and total the value of those units in this case $12,000 and that is the value of the ending inventory. Finally if we were completing a perpetual inventory record you can see the purchases were entered in the purchase columns. The units sold are recorded and notice that they are the same total of costs of goods sold that we've already computed. Finally ending inventory is a running total that results in 400 units of inventory with a cost of $12,000.