Question

EX 7-9 Weighted average cost flow method under perpetual inventory system OBJ. 3 The following units of a particular item were available for sale during the calendar year: ✓ Total Cost of Merchandise Sold, $154,400 is sold the following red Jan. 1 Apr. 19 June 30 Sept. 2 Nov. 15 Inventory Sale Purchase Sale Purchase 4,000 units at $20 2,500 units 6,000 units at $24 4,500 units 1,000 units at $25 The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5.

Answer 1

Weighted average
	Goods purchased			Cost of Goods Sold				Inventory
Date	Units	Cost per unit		Units	Cost per unit	Cost of goods sold		Units	Cost per unit	Inventory Balance
Jan 01								4,000	$20.00	$80,000
Apr. 19				2,500	20.00	$50,000		1,500	$20.00	$30,000
June 30	6,000	24.00						6,000	$24.00	$1,44,000
Average cost								7,500	$23.20	$1,74,000
Sep 02				4500	23.20	$1,04,400		3,000	$23.20	$69,600
Nov 15	1,000	25.00						1,000	$25.00	$25,000
Average cost								4,000	$23.65	$94,600
					COGS	$1,54,400