Question

Weighted Average Cost Method with Perpetual Inventory

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

Date		Transaction	Number of Units		Per Unit		Total
Jan. 1		Inventory	7,600		$71.00		$539,600
10		Purchase	22,800		81.00		1,846,800
28		Sale	11,400		142.00		1,618,800
30		Sale	3,800		142.00		539,600
Feb. 5		Sale	1,520		142.00		215,840
10		Purchase	54,720		83.50		4,569,120
16		Sale	27,360		152.00		4,158,720
28		Sale	25,840		152.00		3,927,680
Mar. 5		Purchase	45,600		85.50		3,898,800
14		Sale	30,400		152.00		4,620,800
25		Purchase	7,600		86.00		653,600
30		Sale	26,600		152.00		4,043,200

Required:

1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method. Round unit cost to two decimal places, if necessary. Round all total cost amounts to the nearest dollar.

Midnight Supplies Schedule of Cost of Goods Sold Weighted Average Cost Method For the Three Months Ended March 31
	Purchases			Cost of Goods Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1								$	$
Jan. 10		$	$
Jan. 28					$	$
Jan. 30
Feb. 5
Feb. 10
Feb. 16
Feb. 28
Mar. 5
Mar. 14
Mar. 25
Mar. 30
Mar. 31	Balances					$			$

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

Total sales	$
Total cost of goods sold	$
Gross profit	$

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

Answer 1

1.

Date Jan. 1 Jan. 10 Jan. 28 Jan. 30 Feb. 5 Feb. 10 Feb. 16 Feb. 28 Mar. 5 Midnight Supplies Schedule of Cost of Goods Sold Weighted Average Cost Method For the Three Months Ended March 31 Purchases Cost of Goods Sold Inventory Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost 7600 71.00 539600 22800 81.00 1846800 30400 78.50 2386400 11400 78.50 894900 19000 78.50 1491500 3800 78.50 298300 15200 78.50 1193200 1520 78.50 119320 13680 78.50 1073880 54720 83.50 4569120 68400 82.50 5643000 27360 82.50 2257200 41040 82.50 3385800 25840 82.50 2131800 152001 82.50 1254000 45600 85.50 3898800 60800 84.75 5152800 30400 84.75 2576400 30400 84.75 2576400 7600 86.00 653600 38000 85.00 3230000 26600 85.00 2261000 11400 85.00 969000 Balances 126920 10538920 11400 85.00 969000 Mar. 14 Mar. 25 Mar. 30 Mar. 31

2.

Total Sales Less: Cost of Goods Sold Gross Profit 19124640 10538920 8585720

Sales 28 30 Feb. 5 Calculating Sales Revenue Selling Quantity Sales Price Sale 11,400 142 16,18,800 Sale 3,800 142) 5,39,600 Sale 1,520 142) 2,15,840 Sale 27,360 152) 41,58,720 Sale 25,840 152 39,27,680 Sale 30,400 152 46,20,800 Sale 26,600 152 40,43,200 1,26,920 1,91,24,640 16 28 14 30 Total

3.

Ending Inventory = 11400@85 = 969000

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