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

Required:
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.

Answer 1

Answer:

Cost of goods sold:

Apr. 19 =  $100,000

Sept. 2 = $215,000

Inventory Balance on:

Apr. 19 =  $60,000

Sept. 2 =  $43,000

Explanation:

a) Data and Calculations:

Date        Description  Units Unit Price  Inventory  Cost of Sales

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

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

June 30  Purchase    4,500    $44      $258,000 ($44 * 4,500 + $60,000)

Sept. 2    Sale            5,000    $43         $43,000     $215,000

Nov. 15   Purchase    2,000    $46       $135,000 ($46 * 2,000 + $43,000)