Question

PR 6-1A FIFO 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: 

PR 6-3A 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 shown in Problem 6-1A. 

Instructions

 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.

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

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

Answer 1

Solution 1:

Computation of ending inventory and COGS under Weighted Average Cost
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	7500	$75.00	$562,500	0	$0.00	$0	0	$0.00	$0	7500	$75.00	$562,500
10-Jan	7500	$75.00	$562,500	22500	$85.00	$1,912,500	0	$0.00	$0	30000	$82.50	$2,475,000
28-Jan	30000	$82.50	$2,475,000	0	$0.00	$0	11250	$82.50	$928,125	18750	$82.50	$1,546,875
30-Jan	18750	$82.50	$1,546,875	0	$0.00	$0	3750	$82.50	$309,375	15000	$82.50	$1,237,500
5-Feb	15000	$82.50	$1,237,500	0	$0.00	$0	1500	$82.50	$123,750	13500	$82.50	$1,113,750
10-Feb	13500	$82.50	$1,113,750	54000	$87.50	$4,725,000	0	$0.00	$0	67500	$86.50	$5,838,750
16-Feb	67500	$86.50	$5,838,750	0	$0.00	$0	27000	$86.50	$2,335,500	40500	$86.50	$3,503,250
28-Feb	40500	$86.50	$3,503,250	0	$0.00	$0	25500	$86.50	$2,205,750	15000	$86.50	$1,297,500
5-Mar	15000	$86.50	$1,297,500	45000	$89.50	$4,027,500	0	$0.00	$0	60000	$88.75	$5,325,000
14-Mar	60000	$88.75	$5,325,000	0	$0.00	$0	30000	$88.75	$2,662,500	30000	$88.75	$2,662,500
25-Mar	30000	$88.75	$2,662,500	7500	$90.00	$675,000	0	$0.00	$0	37500	$89.00	$3,337,500
30-Mar	37500	$89.00	$3,337,500	0	$0.00	$0	26250	$89.00	$2,336,250	11250	$89.00	$1,001,250
Total							125250		$10,901,250	11250		$1,001,250

Solution 2:

Computation of Sales
Date	Sales Qty	Selling Price	Sale Value
28-Jan	11250	$150.00	$1,687,500.00
30-Jan	3750	$150.00	$562,500.00
5-Feb	1500	$150.00	$225,000.00
16-Feb	27000	$160.00	$4,320,000.00
28-Feb	25500	$160.00	$4,080,000.00
14-Mar	30000	$160.00	$4,800,000.00
30-Mar	26250	$160.00	$4,200,000.00
Total	125250		$19,875,000.00

Cost of goods sold = $10,901,250

Gross profit = Sales - COGS = $19,875,000 - $10,901,250 = $8,973,750

Solution 3:

Ending inventory of march 31 = $1,001,250