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	7,200		$74.00		$532,800
10		Purchase	21,600		84.00		1,814,400
28		Sale	10,800		148.00		1,598,400
30		Sale	3,600		148.00		532,800
Feb. 5		Sale	1,440		148.00		213,120
10		Purchase	51,840		86.50		4,484,160
16		Sale	25,920		158.00		4,095,360
28		Sale	24,480		158.00		3,867,840
Mar. 5		Purchase	43,200		88.50		3,823,200
14		Sale	28,800		158.00		4,550,400
25		Purchase	7,200		89.00		640,800
30		Sale	25,200		158.00		3,981,600

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

SOLUTION : 1
	WEIGHTED AVERAGE METHOD
			PURHASES			COST OF GOODS SOLD			ENDING INVENTORY
	Date	Particulars	Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
	Jan, 01	Beginning inventory							7200	$         74.00	$5,32,800
	Jan, 10	Purchases	21600	$             84.00	$18,14,400				28800	$         81.50	$23,47,200
	Jan, 28	Sales				10800	$             81.50	$8,80,200	18000	$         81.50	$14,67,000
	Jan, 30	Sales				3600	$             81.50	$2,93,400	14400	$         81.50	$11,73,600
	Feb, 05	Sales				1440	$             81.50	$1,17,360	12960	$         81.50	$10,56,240
	Feb, 10	Purchases	51840	$             86.50	$44,84,160				64800	$         85.50	$55,40,400
	Feb, 16	Sales				25920	$             85.50	$22,16,160	38880	$         85.50	$33,24,240
	Feb, 28	Sales				24480	$             85.50	$20,93,040	14400	$         85.50	$12,31,200
	Mar, 05	Purchases	43200	$             88.50	$38,23,200				57600	$         87.75	$50,54,400
	Mar, 14	Sales				28800	$             87.75	$25,27,200	28800	$         87.75	$25,27,200
	Mar, 25	Purchases	7200	$             89.00	$6,40,800				36000	$         88.00	$31,68,000
	Mar, 30	Sales				25200	$             88.00	$22,17,600	10800	$         88.00	$9,50,400
			1,23,840		$1,07,62,560	1,20,240		$1,03,44,960	10800		$9,50,400
SOLUTION : 2
	CALCULATION OF TOTAL SALES AND COST OF GOODS SOLD AND GROSS PROFIT
			Amount
		Sales
		Jan - 28	$       15,98,400
		Jan - 30	$          5,32,800
		Feb - 05	$          2,13,120
		Feb - 16	$       40,95,360
		Feb - 28	$       38,67,840
		Mar - 14	$     45,50,400
		Mar - 30	$     39,81,600
		Total	$    1,88,39,520
		Less: Cost of Goods sold	$    1,03,44,960
		Gross Profit	$       84,94,560
SOLUTION : 3		Ending inventory =	$9,50,400