Question

Weighted

1. Average Cost Method with Perpetual Inventory

   The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows:

   Date		Transaction	Number of Units		Per Unit		Total
   Apr. 3		Inventory	25		$1,200		$30,000
   8		Purchase	75		1,240		93,000
   11		Sale	40		2,000		80,000
   30		Sale	30		2,000		60,000
   May 8		Purchase	60		1,260		75,600
   10		Sale	50		2,000		100,000
   19		Sale	20		2,000		40,000
   28		Purchase	80		1,260		100,800
   June 5		Sale	40		2,250		90,000
   16		Sale	25		2,250		56,250
   21		Purchase	35		1,264		44,240
   28		Sale	44		2,250		99,000

   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.

   Dunne Co. Schedule of Cost of Goods Sold Weighted Average Cost Method For the Three Months Ended June 30
   	Purchases			Cost of Goods Sold			Inventory
   Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
   Apr. 3								$	$
   Apr. 8		$	$
   Apr. 11					$	$
   Apr. 30
   May 8
   May 10
   May 19
   May 28
   June 5
   June 16
   June 21
   June 28
   June 30	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 on June 30.
   $

Answer 1

Answer 1)

Dunne Co.

Schedule of Cost of Goods Sold

Weighted Average Cost Method

For the Three Months Ended June 30

Date	Purchase	Cost of goods sold	Balance Inventory
Quantity	Cost per Unit (In $)	Total Cost (In $)	Quantity	Cost per Unit (In $)	Total Cost (In $)	Quantity	Cost per Unit (In $)	Total Cost (In $)
Apr'3							25	1,200.00	30,000.00
Apr'8	75	1,240.00	93,000.00				25	1,200.00	30,000.00
							75	1,240.00	93,000.00
							100	1,230.00	123,000.00
Apr'11				40	1,230.00	49,200.00	60	1,230.00	73,800.00
Apr'30				30	1,230.00	36,900.00	30	1,230.00	36,900.00
May'8	60	1,260.00	75,600.00				30	1,230.00	36,900.00
							60	1,260.00	75,600.00
							90	1,250.00	112,500.00
May'10				50	1,250.00	62,500.00	40	1,250.00	50,000.00
May'19				20	1,250.00	25,000.00	20	1,250.00	25,000.00
May'28	80	1,260.00	100,800.00				20	1,250.00	25,000.00
							80	1,260.00	100,800.00
							100	1,258.00	125,800.00
June'5				40	1,258.00	50,320.00	60	1,258.00	75,480.00
June'16				25	1,258.00	31,450.00	35	1,258.00	44,030.00
June'21	35	1,264.00	44,240.00				35	1,258.00	44,030.00
							35	1,264.00	44,240.00
							70	1,261.00	88,270.00
June'28				44	1,261.00	55,484.00	26	1,261.00	32,786.00
Total	250		313,640.00	249		310,854.00	26		32,786.00

Answer 2)

Calculation of Total Sales

Date	Quantity	Selling price per Unit (In $)	Total Sales(In $)
Apr'11	40	2,000.00	80,000.00
Apr'30	30	2,000.00	60,000.00
May'10	50	2,000.00	100,000.00
May'19	20	2,000.00	40,000.00
June'5	40	2,250.00	90,000.00
June'16	25	2,250.00	56,250.00
June'28	44	2,250.00	99,000.00
Total	249		525,250.00

Therefore total sales of the company is $ 525,250.

Cost of goods sold of the company is $ 310,854 (refer table in answer 1).

Gross Profit = Sales – cost of goods sold

                   = $ 525,250 - $ 310,854

                   = $ 214,396.   

Answer 3)

Cost of ending inventory as on June 30 is $ 32,786. (refer table in answer 1).