Question

The following information is taken from the inventory records of the CNB Company for the month of September:

         
Beginning inventory, 9/1/2021   4,000   units @ $10.00
Purchases:
9/7   2,000   units @ $10.30
9/25   8,000   units @ $10.80
Sales:
9/10   4,000   units
9/29   4,000   units
6,000 units were on hand at the end of September.
________________________________________

Required:
1. Assuming that CNB uses a periodic inventory system and employs the average cost method, determine cost of goods sold for September and September's ending inventory.
2. Assuming that CNB uses a perpetual inventory system and employs the average cost method, determine cost of goods sold for September and September's ending inventory.

Answer 1

PERIODIC INVENTORY SYSTEM
AVERAGE COST METHOD
		COST OF GOODS AVAILABLE FOR SALE			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
Sept, 01	Beginning inventory	4000	$                        10.00	$                        40,000
Purchases
Sept, 09	Purchases	2000	$                        10.30	$                        20,600
Sept, 25	Purchases	8000	$                        10.80	$                        86,400
	Goods Avaiable for sold	14000	$                        10.50	$                    1,47,000
	Sales (4000 units + 4000 units)	8000			8000	$             10.50	$           84,000	6000	$         10.50	$           63,000
	TOTAL				8000		$84,000	6000		$63,000
	ANSWER :
	Cost of Goods Sold	$84,000
	Ending inventory	$63,000
PERPETUAL INVENTORY SYSTEM
AVERAGE COST METHOD
		PURHASES			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
Sept, 01	Beginning inventory	4000	$                        10.00	$                        40,000				4000	$         10.00	$           40,000
Sept, 09	Purchases	2000	$                        10.30	$                        20,600				6000	$         10.10	$60,600
Sept, 10	Sales				4000	$             10.10	$40,400	2000	$         10.10	$20,200
Sept, 25	Purchases	8000	$                        10.80	$                        86,400				10000	$         10.66	$1,06,600
Sept, 29	Sales				4000	$             10.66	$42,640	6000	$         10.66	$63,960
	TOTALS	14,000		$1,47,000	8,000		$83,040	6000		$63,960
	ANSWER :
	Cost of Goods Sold	$83,040
	Ending inventory	$63,960