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 4,000 units at $40 Apr. 19 Sale 2,500 units June 30 Purchase 4,500 units at $44 Sept. 2 Sale 5,000 units Nov. 15 Purchase 2,000 units at $46 The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5.

Answer 1

Answer:

Cost of goods sold                                  Ending Inventory

April 19  2,500 at $40  =   $100,000     1,500 at $40 =       $60,000

Sept 2   5,000 at $49.67   248,350      1,000 at $49.67 =   49,670

Explanation:

Data and Calculations:

Date      Details                  Units                Cost price   Total cost  Inventory

Jan. 1      Inventory            4,000 units at     $40                            $160,000

Apr. 19   Sale                     2,500 units         $40        $100,000       60,000

June 30 Purchase            4,500 units at $44              298,000

Sept. 2   Sale                    5,000 units         $50          248,350       49,670        

Nov. 15   Purchase           2,000 units at $46

b) Cost of goods sold                             c) Ending Inventory

April 19  2,500 at $40  =   $100,000     1,500 at $40 =      $60,000

Sept 2   5,000 at $49.67   248,350      1,000 at $49.67 =   49,670