Question

Weighted Average Cost Method with Perpetual Inventory 

The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows: 

Required:

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method.

2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period. 

3. Determine the ending inventory cost as of March 31.

Answer 1

Midnight Supplies Perpetual Inventory Account Weighted Average Cost Method for the three months ended March 31 Cost of Merchandise sold Total Cost Qty Unit cost Total Cost Purchases Unit cost Qty Qty 7500 22500 $ 85.00 $ 19,12,500.00 30000 11250 3750 1500 $ 82.50 $ $ 82.50 $ $ 82.50 $ 9,28,125 3,09,375 1,23,750 54000 $ 87.5 $ 47,25,000.00 Date Jan-01 Jan-10 Jan-28 Jan-30 Feb-05 Feb-10 Feb-16 Feb-28 Mar-05 Mar-14 Mar-25 Mar-30 Mar-31 18750 15000 13500 67500 40500 15000 60000 Inventory Balance Unit cost Total Cost $ 75.00 $ 5,62,500 $ 82.50 $ 24,75,000 $ 82.50 $ 15,46,875 $ 82.50 $ 12,37,500 $ 82.50 $ 11,13,750 $ 86.50 $ 58,38,750 $ 86.50 $ 35,03,250 $ 86.50 $ 12,97,500 $ 88.75 $ 53,25,000 $ 88.75 $ 26,62,500 $ 89.00 $ 33,37,500 $ 89.00 $ 10,01,250 $ 10,01,250 27000 25500 $ 86.50 $ $ 86.50 $ 23,35,500 22,05,750 45000 $ 89.50 $ 40,27,500.00 30000 $ 88.75 $ 26,62,500 7500 $ 90.00 $ 6,75,000.00 30000 37500 11250 26250 $ 89.00 $ $ 23,36,250 1,09,01,250 Balances Computation of Total Sales Date Units Jan-28 11,250 $ Jan-30 3,750 $ Feb-05 1,500 $ Feb-16 27,000 $ Feb-28 25,500 $ Mar-14 30,000 $ Mar-30 26,250 $ Total Sales Rate Product 150 $ 16,87,500 150 $ 5,62,500 150 $ 2,25,000 160 $ 43,20,000 160 $ 40,80,000 160 $ 48,00,000 160 $ 42,00,000 $ 1,98,75,000 Solution 2) Total Sales Total cost of Merchandise sold Gross profit from Sales $ 1,98,75,000 $ 1,09,01,250 $ 89,73,750 Solution 3) Ending Inventory as of March 31 $ 10,01,250

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