Question

EX 7-8 Weighted average cost flow method under perpetual inventory system The following units of a particular item were available for sale during the calendar war Inventory Sale Jan. 1 Mar. 18 May 2 Aug. 9 Oct. 20 Purchase Sale Purchase 30,000 units at $30.00 24,000 units 54,000 units at $31.00 45,000 units 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.

Answer 1

Weighted Average Cost of Merchandise Sold Quantity Unit Cost Total Cost Purchases Unit Cost Date Quantity Total Cost 24000 30.00 720000 54000 Inventory Unit Cost Total Cost 30.00 900000 30.00 180000 30.90 1854000 30.90 463500 31.601137600 31.60 1 137600 31.00 Jan. 01 Mar. 18 May 02 Aug. 09 Oct. 20 | Dec. 31 1674000 Quantity 30000 6000 60000 15000 36000 36000 45000 30.90 1390500 32.10 674100 21000 Balances 2110500 First-in, First-Out Cost of Merchandise Sold Quantity Unit Cost Total Cost Purchases Unit Cost Date Quantity Total Cost Jan. 01 1 24000 30.00 720000 Mar. 18 May 02 Total Cost 900000 180000 180000 1674000 54000 31.00 1674000 Inventory Unit Cost 30.00 30.00 30.00 31.00 30.00 31.00 31.00 32.10 Quantity 30000 6000 6000 54000 0 15000 15000 21000 36000 Aug. 09 / 6000 39000 30.00 31.00 180000 1209000 Oct. 202100032.10674100 465000 465000 674100 1139100 Dec. 31 Balances 2109000