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Fiesta28 [93]
4 years ago
5

Weighted Average Cost Flow Method Under Perpetual Inventory System

Business
1 answer:
Fudgin [204]4 years ago
6 0

Answer and Explanation:

The computation of the cost od merchandised sold for each sale and the inventory balance after each sale is presented in the attachment below;

The perpetual inventory is the system which updated the inventory as on a regular basis

While on the other hand,  the weighted average cost method is the method in which the average cost is calculated after each every purchase is made

In the calculation below:

1. The weighted average cost of $30.90 come from

= (Total inventory cost) ÷ (Total quantity)

= ($180,000 + $1,674,000) ÷ (60,000 units)

= $30.90

1. The weighted average cost of $31.60 come from

= (Total inventory cost) ÷ (Total quantity)

= ($463,500 + $674,100) ÷ (36,000 units)

= $31.60

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4 0
1 year ago
On January 1, 2022, the Sheridan Company ledger shows Equipment $49,700 and Accumulated Depreciation $18,280. The depreciation r
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Answer:

revised annual depreciation will be : 13710

Explanation:

After revision the remaining life of equipment shrank down to 2 years, so the depreciation working will be worked out to adjusted the impact of decreasing of useful life.

As per existing information the depreciation charges are calculated as :

(Cost-Salvage Value)/Useful life= (49700-4000)/10 = 4570

Accumulated Depreciation indicates that 4 years have past by (18280/4570)

now remaining years are 6 which will be reduced to 2 after revision so the new working will be as follows:

Remaining Cost :31420  (49700 -18280)

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Revised Calculated Depreciation Annual  : (31420-4000)/2 = 13710

It can be further verified through simple math also:

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Value available for depreciation after salvage value : 31420 -4000= 27420

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