Question

Weighted Average Cost Flow Method Under Perpetual Inventory System

The following units of a particular item were available for sale during the calendar year:

Jan. 1	Inventory	30,000	units at $30.00
Mar. 18	Sale	24,000	units
May 2	Purchase	54,000	units at $31.00
Aug. 9	Sale	45,000	units
Oct. 20	Purchase	21,000	units at $32.10

The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round unit cost to two decimal places, if necessary.

Schedule of Cost of Merchandise Sold Weighted Average Cost Flow Method
	Purchases			Cost of Merchandise Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1								$	$
Mar. 18					$	$
May 2		$	$
Aug. 9
Oct. 20
Dec. 31	Balances					$		$	$

Answer 1

	Purchases			Cost of goods sold - Perpetual			Inventory on hand
Weighted average	Quantity	Cost per unit	Total cost	Quantity	Cost per unit	Total cost	Quantity	Cost per unit	Total cost
Jan-01							30,000	$    30.00	$    9,00,000
Mar-18				24,000	$    30.00	$   7,20,000	6,000	$    30.00	$    1,80,000
May-02	54,000	$    31.00	$    16,74,000				60,000	$    30.90	$ 18,54,000
Aug-09				45,000	$    30.90	$ 13,90,500	15,000	$    30.90	$    4,63,500
Oct-20	21,000	$    32.10	$      6,74,100				36,000	$    31.60	$ 11,37,600
Totals	75,000		$    23,48,100	69,000		$ 21,10,500	36,000		$ 11,37,600