Question

Using the data below, determine the ending inventory amount assuming the weighted average method with a periodic inventory system. Beginning inventory, 10 units Purchases, 20 units Total cost of units available for sale, $3,000 Ending inventory, 12 units $3,000 $100 $1,200 None of these choices are correct. 2. Using the data below, calculate the cost of merchandise sold. Beginning inventory, $1,000 Inventory purchased, $3,000 Net Income, $40,000 Ending inventory, $2,000 Sales, $185,000 $2,000 $4,000 $185,000 $145,000

Answer 1

Answer:

The Cost of Merchandise Sold or Cost Of Goods Sold COGS =

Total Costs of Units Available for Sale = $3,000.00

Weighted Average Cost = $133.33.00

COGS = (Total Costs of Units Available for Sale + Weighted Average Cost)

COGS = $3,000.00 + $133.33.00

COGS = $399,990.00

Explanation:

SOLUTION

Actual Cost of All Inventory (ACOI) = (Beginning of Inventory + Purchases)

Beginning of Inventory = $1,000.00

Purchases = $3,000.00

ACOI = $1000.00 + $3,000.00

ACOI = $4,000.00.

Total Units of Inventory = (Beginning of Inventory units + Purchases units)

Beginning of Inventory units = 10 Units

Purchases units = 20 Units

Total Units of Inventory = 10 + 20

Total Units of Inventory = 30 Units.

The Weighted Average Cost

WAC = Actual cost Of Inventory ÷ Total Units of Inventory

Actual cost Of Inventory = $4,000.00

Total Units of Inventory = 30 Units

WAC = $4,000.00 ÷ 30 Units

WAC = $133.33

Ending Inventory = Ending inventory x WAC

Ending Inventory = 12 units x $133.33

Ending Inventory = $1,599.96

The Cost of Merchandise Sold or Cost Of Goods Sold COGS =

Total Costs of Units Available for Sale = $3,000.00

Weighted Average Cost = $133.33.00

COGS = (Total Costs of Units Available for Sale + Weighted Average Cost)

COGS = $3,000.00 + $133.33.00

COGS = $399,990.00